Question
Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires four small chips that cost $6 each and are purchased from an
Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires four small chips that cost $6 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as shown below: Year 2 Year 3 First Second Third Fourth First Budgeted production, (Calculators) 57,000 82,000 151,000 96,000 73,000 The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of a quarter must equal 15% of the following quarters production needs. Required: Prepare a direct materials budget for chips, by quarter and in total, for Year 2. (Do not round intermediate calculations. Input all amounts as positive values.)
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