Perine Company has 5,421 pounds of raw materials in its December 31, 2016, ending inventory. Required production for January and February of 2017 are 4,170 and 5,990 units, respectively. 5 pounds of raw materials are needed for each unit, and the estimated cost per pound is $6. Management desires an ending inventory equal to 26% of next months materials requirements.

PERINE COMPANY Direct Materials Bucget For the Month Ending January 31, 2017 Units to be produced Direct Materials Per Unit Total Pounds Required for Production T L Add Desired Ending Inventory Total Materials Required Direct Materials purchases Cost Per Pound Total Cost of Direct Materials Purchases 417 2085 26271 20850 125100