ABC Company has the following production budget for the months of January through April of 2012:
January 25,000 February 30,000
March 40,00 April 20,000
One unit of finished product requires 5 pounds of raw material costing $ 2 per pound. The desired ending inventory each month is 40% of the next month's requirement of raw material. In December, 2011, the ending inventory of raw material was 10,000 pounds.
Required: Prepare a raw materials purchase budget for the first quarter.