Juda Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays $$1$ for each computer chip. To help to guard against stockouts of the computer chip, Juda 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:

View the production schedule. ${?}^2$

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.

Juda Industries

Direct Materials Budget

For the Months of January through March

Units to be produced

Multiply by: Quantity of direct materials needed per unit

Quantity needed for production

Plus: Desired ending inventory of direct materials

Total quantity needed

Less: Beginning inventory of direct materials

Quantity to purchase

Multiply by: Cost per unit

$2$: Production schedule

$\backslash$table$[[,$Stuffed animals to be produced$],[$January $.....,5,600],[$February $....,4,900],[$March $......,4,400],[$April$.......,4,800]]$