Oak Creek Company is preparing its master budget for 2010. Relevant data pertaining to its sales, production, and direct materials budgets are as follows.

Sales: Sales for the year are expected to total 1,000,000 units. Quarterly sales are 20%, 25%, 25%, and 30% respectively. The sales price is expected to be $40 per unit for the first three quarters and $45 per unit beginning in the fourth quarter. Sales in the first quarter of 2011 are expected to be 10% higher than the budgeted sales for the first quarter of 2010.

Production: Management desires to maintain the ending finished goods inventories at 20% of the next quarter’s budgeted sales volume.

Direct materials: Each unit requires 2 pounds of raw materials at a cost of $10 per pound.

Management desires to maintain raw materials inventories at 10% of the next quarter’s production requirements. Assume the production requirements for first quarter of 2011 are 500,000 pounds.

Prepare the sales, production, and direct materials budgets by quarters for 2010.