Requirement Prepare the Direct Materials Budget for Hoak Inc. Company. Company policy calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 2,646 lbs of materials, which complies with the policy. The company expects to have 5,040 lbs. of materials in inventory at year-end. The product's manufacturing cost is $129 per unit, including per unit costs of $60 for materials (4 lbs. at $15 per lb.), $44 for direct labor (2 hours $22 direct labor rate per hour), $17 for variable overhead, and $8 for fixed overhead