The management at Royal Company wants ending inventory to be equal to 20% of the following month's budgeted sales in units.

On March 31, 4,000 units were on hand.

Direct Materials Budget

Five pounds of material are required per unit of product.

Materials on hand at the end of each month should equal 10% of the following month's production

On March 31^st, 13,000 pounds of material are on hand.

Expected Cash Disbursement for Materials

Material cost is $0.40 per pound.

March 31^staccounts payable balance is $12,000