The following is a Sales budget for RTI Industries Inc. for 2017:

January

February

March

April

May

June

3,000

4,000

6,000

9,000

15,000

20,000

Each unit requires 2.5 pounds of raw materials that are estimated to cost an average of $3.50 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 25% of the pounds needed for the following month's production. The desired ending direct materials for March is 4,000 pounds.

Required

For the first quarter of 2017, prepare (1) a production budget and (2) a direct materials budget.