Oak Creek Company is preparing its master budget for 2020. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Sales: Sales for the year are expected to total 1,000,000 units. Quarterly sales are 20%, 25%, 25%, and 30%, respectively. The sales price is expected to be $40 per unit for the first three quarters and $46 per unit beginning in the fourth quarter. Sales in the first quarter of 2021 are expected to be 10% higher than the budgeted sales for the first quarter of 2020. Production: Management desires to maintain the ending finished goods inventories at 20% of the next quarter's budgeted sales volume. Direct materials: Each unit requires 2 kg of raw materials at a cost of $10 per kilogram. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2021 are 400,000 kg.

Prepare the production budget by quarters for 2020. OAK CREEK COMPANY Production Budget For the Year Ending December 31, 2020 Quarter 1 2 3 Year 4 Unit sales 200000 250000 250000 300000 1000000 1> X Add Ending inventory 50000 50000 60000 44000 204000 > X Total required 250000 300000 310000 344000 1204000 X Less Beginning inventory 40000 50000 50000 60000 200000 210000 250000 260000 284000 1004000 Total Prepare the direct materials budget by quarters for 2020. OAK CREEK COMPANY Direct Materials Budget For the Year Ending December 31, 2020 Quarter 1 2 3 4 Year Units to be produced 210000 250000 260000 284000 1,004,000 > > Direct materials per unit 2 2 2 8 Total kilograms required for production 420000 500000 520000 568000 2,008,000 X x Add Desired ending inventory 50000 52000 56800 63000 221,800 X Total materials required 470,000 552,000 576,800 631,000 2,229,800 X Less Beginning materials inventory 42000 50000 52000 56800 200,800 x X X Direct materials per unit 428000 502000 524800 574200 2,029,000 X 10 10 10 10 40 Cost per kilogram $1 4,280,000 5,020,000 Total cost of direct materials purchases 5,248,000 5,742,000 20,290,000 $ $ HA