Reddick Ltd. manufactures picture frames. Sales for August are expected to be 30,000 units of various sizes. Historically, the average frame requires four metres of framing, one square metre of glass, and two square metres of backing. Beginning inventory includes 1,000 metre of framing, 1500 square metres of glass, and 1500 square metres of backing. Current prices are $0.40 per metre of framing, $6.50 per square metre of glass, and $2.5 per square metre of backing. Ending inventory should be 120% of beginning inventory. Purchases are paid for in the month acquired.

Required:

1. Determine the quantity of framing, glass, and backing that is to be purchased during August.

5. Determine the total costs of direct materials for August purchases.

6. Explain the purpose of the budgeting system based on this question.