Micro Products Inc. has developed a very powerful electronic calculator. Each calculator requires three small chips that cost $3 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 Second Third 100,000 160,000 First 70,000 Budgeted production, in calculators Year 3 First 90,000 Fourth 110,000 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 stock-outs. For this reason, the inventory of chips at the end of a quarter must be equal to 10% of the following quarter's production needs. A total of 46,000 chips will be on hand to start the first quarter of year 2. Required: Prepare a direct materials purchases budget for chips, by quarter and in total, for year 2. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. Micro Products, Inc. Direct Materials Budget - Year 2 Quarter First Second Third Fourth Year Required production in 70,000 100,000 160,000 110,000 calculators 440,000 Number of chips per calculator Production needs--chips 210,000 300,000 480,000 330,000 1,320,000 Add: Ending inventory 30,000 48,000 33.000 27,000 138,000 Total needs 240,000 348,000 513,000 357,000 1.458,000 Deduct: Beginning inventory 46.000 30,000 48,000 33,000 157,000 Required purchases-chips 194,000 318,000 465,000 324,000 1,301,000 S S $ S S Total cost of purchases 582.000 954.000 1.395.000 972.000 3.903.000 "Red text indicates no response was expected in a cell or a formula-based calculation is incorrect, no points deducted