Langer Company produces plastic items, including plastic housings for

humidifiers. Each housing requires about 19 ounces of plastic costing $0.08 per

ounce. Langer molds 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

ASIFA USMAN

Objective 15marks

Subjective 35marks

October 6,300

Inventory policy requires that sufficient plastic be in ending monthly inventory to

satisfy 30% of the following month's production needs. The inventory of plastic at

the beginning of July equals exactly the amount needed to satisfy the inventory

policy.

Required:

Prepare a direct materials purchases budget for July, August, and September,

showing purchases in units and in dollars for each month and in total. If required,

round the total purchase cost to nearest whole value.