Miami Solar manufactures solar panels for industrial use. The company budgets production of 5,600 units (solar panels) in July and 5,100 units in August. Each unit requires 4 pounds of direct materials, which cost $6 per pound. The companys policy is to maintain direct materials inventory equal to 40% of the next months direct materials requirement. As of June 30, the company has 8,960 pounds of direct materials in inventory.

MIAMI SOLAR
Direct Materials Budget
	July
Units to produce	5,600
Materials required per unit (pounds)	4
Materials needed for production (pounds)
Add: Desired ending materials inventory
Total materials required (pounds)
Less: Beginning materials inventory (pounds)
Materials to purchase (pounds)
Materials cost per pound
Cost of direct materials purchases