The Bakery on the Riverbank produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of fl our. The bakery pays $3.00 per pound of the organic fl our used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months:
July ....................................................................................................................... 1,480 loaves
August .................................................................................................................. 1,940 loaves
September ............................................................................................................ 1,720 loaves
October ................................................................................................................ 1,400 loaves
The bakery has a policy that it will have 20% of the following month's fl our needs on hand at the end of each month. At the end of June, there were 75 pounds of fl our on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter.