Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires four small chips that cost $8 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)	60,000	82,000	159,000	98,000		78,000

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.)

Micro Products, Inc. Direct Materials Budget - Year 2
	Quarter
	First	Second	Third	Fourth	Year - Total
Required production of calculators
Number of chips per calculator
Total production needschips
(Click to select)AddDeduct: (Click to select)Beginning inventoryEnding inventory
Total needs
(Click to select)DeductAdd: (Click to select)Beginning inventoryEnding inventory
Required purchaseschips
Total cost of purchases	$	$	$	$	$