Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2019 follow:

	Finished Components
	C12				D57
Requirements for each finished component:
RM 1		10	pounds			8	pounds
RM 2		0				4	pounds
RM 3		2	pounds			1	pound
Direct labor		2	hours			3	hours
Product information:
Sales price	$	190			$	230
Sales (units)		12,000				9,000
Estimated beginning inventory (units)		410				130
Desired ending inventory (units)		300				200

	Direct Materials Information
	RM1				RM2				RM3
Cost per pound	$	4			$	3.50			$	0.50
Estimated beginning inventory in pounds		3,000				1,800				1,500
Desired ending inventory in pounds		4,100				1,500				2,000

The firm expects the average wage rate to be $25 per hour in 2019. Spring Manufacturing uses direct labor hours to apply overhead. Each year the firm determines the overhead application rate for the year based on budgeted direct labor hours for the year. The firm maintains negligible Work-in-Process Inventory and expects the cost per unit for both beginning and ending inventories of finished products to be identical.

	Factory Overhead Information
Indirect materialsvariable	$	7,000
Miscellaneous supplies and toolsvariable		4,800
Indirect laborvariable		42,000
Supervisionfixed		110,000
Payroll taxes and fringe benefitsvariable		200,000
Maintenance costsfixed		15,000
Maintenance costsvariable		10,080
Depreciationfixed		71,380
Heat, light, and powerfixed		43,440
Heat, light, and powervariable		15,000
Total	$	518,700

	Selling and Administrative Expense Information
Advertising	$	65,000
Sales salaries		190,000
Travel and entertainment		61,000
Depreciationwarehouse		4,900
Office salaries		63,000
Executive salaries		300,000
Supplies		4,100
Depreciationoffice		5,500
Total	$	693,500

The effective income tax rate for the company is 30%.

3. Prepare the Direct materials purchases budget (units and dollars) for 2019.

Direct Materials Purchases Budget (units and dollars) For the Year 2019 C12 D57 Total 9,070 9,070 8 4 Raw material (RM) 1: Budgeted production Pounds per unit RM 1 needed for production Add: Desired beginning inventory (lbs.) Total RM 1 needed (lbs.) 72,560 36,280 108,840 108,840 Required purchases of RM 1 (lbs.) 108,840 Budgeted purchases, RM 1 $ 0 Raw material (RM) 2: Raw material (RM) 2: Budgeted production RM 2 needed for production 0 0 Total RM 2 needed (lbs.) 0 Required purchases of RM 2 (lbs.) 0 Budgeted purchases, RM 2 $ 0 Raw material (RM) 3: Budgeted production RM 3 needed for production 0 0 0 Total RM 3 needed (lbs.) 0 Required purchases of RM 3 (lbs.) 0 Budgeted purchases, RM 3 $ 0