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stenback Industries manufactures a popular interactive stuffed animal for children that requires two two computer chips inside each toy. The company...

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 computer​ chip, Stenback


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


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

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