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Electro Company manufactures transmissions for electric cars Management reports ending finished goods inventory for the first quarter at 177600 units. The following unit sales are budgeted during the rest of the year second quarter 296,000 units; third quarter, 375,000 units; and fourth quarter, 487,500 units. Company policy calls for the ending finished goods inventory of a quarter to equal 60% of the next quarter's budgeted unit sales Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture. ELECTRO COMPANY Production Budget Second Quarter Third Quarter Next period budgeted sales units Units to produce Electro Company budgets production of 670,000 electric panels in the second quarter and 740.000 electric panels in the third quarter Each panel requires 0.80 pound of direct material at a cost of $2.00 per pound. The company desires to end each quarter with an ending inventory of this material equal to 20% of next quarter's budgeted materials requirements. Beginning inventory of this material is 107,200 pounds Prepare a direct materials budget for the second quarter. ELECTRO COMPANY Direct Materials Budget Units to produce Second Quarter 670.000 units Materials needed for production (pounds) Total materials required Materials to purchase (pounds) Cost of direct materials purchases

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