The Bakery by the Bay produces organic bread that is sold by the loaf. Each loaf requires 0.5 kg of flour. The company pays $3.00 per kilogram of the organic flour used in its loaves. The Bakery by the Bay expects to produce the following number of loaves in each of the upcoming four months:
July.................................................................................................... 1,500 loaves
August............................................................................................... 1,800 loaves
September....................................................................................... 1,600 loaves
October.............................................................................................. 1,500 loaves
The company has a policy to have 10% of the following month’s flour needs on hand at the end of each month. At the end of June, there were 75 kg of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.