Palm Imagination makes and sells silk palm trees. Each tree uses 0.80 yards of silk fabric. Budgeted production of trees in units for the next five months is as follows:

April May June July August

Budgeted 24,160 23,490 26,570 26,880 22,900

production

Budgeted 24,500 22,800 26,250 27,850 23,000

sales

The company wants to maintain monthly ending inventories of fabric equal to 15% of the following month's budgeted production needs, and monthly inventories of trees equal to 20% of the number needed for next month's sales. The cost of silk is $2.00 per yard. Direct labor cost is $14.00 per hour and it takes 66 minutes to complete each tree. Factory overhead is applied at the rate of $1.25 per direct labor dollar.

1. Prepare a direct materials purchases budget for June.
2. Calculate the amount of Raw Materials and Finished Goods Inventory to be reported on Palm Imagination's June 30 balance sheet.