Q. Problem Key Co. manufactures beanies. The budgeted units to be produced also sold are below:

Expected Production Expected Sales
August 3,100 2,900
September 2,800 3,900

It takes 24 yards of yarn to produce a beanie. The organization's policy to maintain yarn at the end of each month equal to 5% of the next month's production needs also to maintain a finished goods inventory at the end of each month equal to20% of next month's anticipated sales.

The cost of yarn is $0.20 a yard. At August 1, 3,720 yards of yarn were on hand.

In good form, prepare a materials purchases budget for the August in the space provided.