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Q1 Smoke, Inc. makes and sells serving trays. Each tray uses 1/2 pound of plastic. Budgeted production of trays in units for the next three

Q1 Smoke, Inc. makes and sells serving trays. Each tray uses 1/2 pound of plastic. Budgeted production of trays in units for the next three months is as follows:

April May June

Budgeted production 21,000 22,000 24,000

The company wants to maintain monthly ending inventories of plastic equal to 25% of the following month's budgeted production needs. The cost of plastic is $2.20 per pound.

Required:

Prepare a direct material purchases budget for the month of May.

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