Planton Manufacturing plans to produce 40,000 units, 44,000 units, and 50,000 units, respectively, in October, November, and December. Each of these units requires four units of part no. 879, which the company can purchase for $7 each. Planton has 55,000 units of part no. 879 in stock on September 30.

Required:

Prepare a direct-material purchases budget for October and November in units and dollars. Management desires to maintain an ending raw-material inventory equal to 30% of the following month's production usage.

October November Planned production Units of part No. 879 Units of part No. 879 used in production 0 Total units of part No. 879 needed Units of part No. 879 to be purchased Cost per unit Cost of direct material purchases $