Stuffed animals to be produced 5,500 4,400 January.... February March .... April 4,900 . 4,000 Gable Industries manufactures a popular interactive stuffed animal for children that requires four computer chips inside each toy. The company pays $1 for each computer chip. To help to guard against stockouts of the computer chip, Gable Industries has a policy that states that the ending inventory of computer chips should be at least 30% of the following month's production needs. The production schedule for the first four months of the year is as follows: (Click the icon to view the production schedule.) Requirement Prepare a 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. January February March Quarter Units to be produced 5,500 4,400 4,900 14,800 4 4 4 4 Multiply by: Quantity of direct materials needed per unit Quantity needed for production 22,000 17,600 19,600 59,200 5,280 5,880 4,800 4,800 Plus: Desired ending inventory of direct materials Total quantity needed 27,280 23,480 24,400 64,000 3850 3080 3430 3850 Less: Beginning inventory of direct materials Quantity to purchase 23430 20400 20970 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Multiply by: Cost per unit 23430 20400 Total cost of direct material purchases