Question 3A Budgeting [4 marks} The Johnston Company had the following costs based on the production and sale of 40,000 units: Direct Materials $0.50 er k; Direct Materials Other information: The company had the following budgeted sales for December, January, and February: m 50.000 50,000 30,000 Sellin_ Price er unit $42funit $45funit $35funit The company has a policy of always maintaining the following inventory levels: Finished Goods Inventory = 10% of next month's sales. Direct Materials Inventory = 30% of next month's production requirements. The company's sales and collection history shows that 10% of all sales are for cash and the accounts receivable are collected in the following way: T0% in the month of the sale 28% in the month after the sale Reguire: Calculate the direct materials needs for December {production needs plus target ending inventory}, and the direct materials purchase budget for December. Enter the answers in the table below: Total needs of direct materials for Total Cost of direct materials December to be urchased in December 340,500 KG $132,000