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Juda Industries manufactures a popular interactive stuffed animal for children that requires four computer chips inside each toy. The company pays $2 for each computer

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Juda Industries manufactures a popular interactive stuffed animal for children that requires four computer chips inside each toy. The company pays $2 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 25% 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. Direct Materials Budget For the Months of January through March Data Table January February March Quarter Units to be produced 5800 4200 4800 14800 Stuffed animals to be produced Multiply by: Quantity of direct materials needed per unit 17400 Quantity needed for production 126001 14400 444000 January ..... 5,800 February .... 4,200 Plus: Desired ending inventory of direct materials March 4,800 Total quantity needed April ....... 4,400

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