Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,800 units (solar panels) in July and 4,400 units in August.

QS 20-9 (Algo) Manufacturing: Direct materials budget LO P1 Each unit requires 3 pounds of direct materials, which cost $5 per pound. The company's policy is to maintain direct materials inventory equal to 40% of the next month's direct materials requirement. As of June 30, the company has 5,760 pounds of direct materials in inventory. Prepare the direct materials budget for July. MIAMI SOLAR Direct Materials Budget July Units to produce 4,800 Materials required per unit (pounds) 3 Materials needed for production (pounds) 14,400 Add: Desired ending materials inventory Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials cost per pound Materials to purchase (pounds) Cost of direct materials purchases 5,760 $ 5