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Dallas Industries has adopted the following production budget for the first 4 months of 2013.
Month
Units
January
10,000
March
5,000
February
8,000
April
4,000
Each unit requires 3 pounds of raw materials costing $2 per pound. On December 31, 2012, the ending raw materials inventory was 9,000 pounds. Management wants to have a raw materials inventory at the end of the month equal to 30% of next month's production requirements.
Instructions
Prepare a direct materials purchases budget by month for the first quarter.
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