Ignore the numbers on blue

Austen Industries manufactures a popular interactive stuffed animal for children that requires three computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Auste Industries has a policy that states that the ending inventory of computer chips should be at least 20% of the following month's production needs. The production schedule for the first four months of the year is as follows: (Click the icon to view the production schedule.) Requirement Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget. Austen Industries Data Table March Quarter Stuffed animals to be produced 4,100 14,300 5,700 January ..... February .... 3 3 4,500 March 4,100 Direct Materials Budget For the Months of January through March January February Units to be produced 5,700 4,500 3 Multiply by: Quantity of direct materials needed per unit 3 Quantity needed for production 17,100 13,500 2,700 2,460 Plus: Desired ending inventory of direct materials Total quantity needed 19,800 15,960 Less: Beginning inventory of direct materials Quantity to purchase Multiply by: Cost per unit 42,900 12,300 2,820 4.700 April ....... 2,820 15,120 45,720 Print Done Total cost of direct material purchases