stenback Industries manufactures a popular interactive stuffed animal for children that requires two

two computer chips inside each toy. The company pays $ 4 for each computer chip. To help to guard against stockouts of the computerchip, Stenback

Stenback Industries has a policy that states that the ending inventory of computer chips should be at least 25% of the followingmonth's production needs. The production schedule for the first four months of the year is asfollows:

stuffed animal to be produced

jan . 5,200

feb 4,300

march 4,500

april 4,900

Requirement

need direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget.

jan . feb march . quarter .

Units to be produced

Multiply by: Quantity of direct materials needed per unit

Quantity needed for production

Plus: Desired ending inventory of direct materials

Total quantity needed

Less: Beginning inventory of direct materials

Quantity to purchase

Multiply by: Cost per unit

Total cost of direct material purchases