DeWitt Industries has adopted the following production budget for the first 4 months of 2020.
| Month | Units | Month | Units |
| January | 10,000 | March | 5,000 |
| February | 8,000 | April | 4,000 |
Each unit requires 2 pounds of raw materials costing $3 per pound. On December 31, 2020, the ending raw materials inventory was 4,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 20% of next month's productions requirements
Instructions
Prepare a direct materials purchases budget by month for the first quarter.
Solution
