E$8-21($Algo$)$ Preparing Production and Direct Materials Purchases Budgets $[$LO $8-3$b$,$ c$]$

Galactic Incorporated manufactures flying drone toys. Sales units for January, February, March, April, and May were $380,360,432,392,$ and $460$ respectively.

Required:

The company$$s policy for ending finished goods is $25$ percent of next month's sales. Determine production budget for the first quarter.

The drone toy includes $2$ LED lights, which cost $$15$ each. The company requires ending direct materials to be $20$ percent of next month's materials requirement. Determine direct materials purchases budget with respect to LED lights for the first quarter.