Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing @ $0.08 per ounce. Langer moulds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows:

Units

July	3,500
August	4,400
September	4,900
October	6,300

Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 20% of the following month's production needs. The inventory of plastic at the beginning of July was 700 ounces.

Required:

a. Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total.

b. Calculate cash requirement for the months of August and September if 80% of the materials purchased is paid in the month of purchase and 20% is paid in the following month.