Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,700 units (solar panels) in July and 5,400 units in August. Each unit requires 2 pounds of direct materials, which cost $6 per pound. The company's policy is to maintain direct materials inventory equal to 30% of the next month's direct materials requirement. As of June 30, the company has 2,820 pounds of direct materials in inventory, which complies with the policy. Prepare a direct materials budget for July. 4,700 2 MIAMI SOLAR Direct Materials Budget For Month Ended July 31 Budget production (units) Materials requirements per unit Materials needed for production (lbs.) Add: Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Less: Beginning inventory (lbs.) Materials to be purchased (lbs.) Materials price per pound Budgeted cost of direct materials purchases 9,400 3,240 12,640 (2,820) $ 6