Micro products inc has developed a very powerful electronic

Reference no: EM13483166

Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires four small "chips" that cost $6 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as shown below:

	Year 2				Year 3
	First	Second	Third	Fourth	First
Budgeted production, in calculators	51,000	82,000	142,000	96,000	78,000

The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of a quarter must equal 15% of the following quarter's production needs. A total of 30,600 chips will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for chips, by quarter and in total, for Year 2. (Do not round intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your response.)

Micro Products, Inc. Direct Materials Budget - Year 2
	Quarter
	First	Second	Third	Fourth	Year
Required production in calculators
Number of chips per calculator	×	×	×	×	×
Production needs-chips
:

Total needs
:

Required purchases-chips

Total cost of purchases	$	$	$	$	$

Reference no: EM13483166

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