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Direct Materials Purchases Budget Anticipated sales for Safety Grip Company were 35,000 passenger car tires and 11,000...

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Accounting

Direct Materials Purchases Budget

Anticipated sales for Safety Grip Company were 35,000 passengercar tires and 11,000 truck tires. Rubber and steel belts are usedin producing passenger car and truck tires according to thefollowing table:

Passenger CarTruck
Rubber25 lbs. per unit58 lbs. per unit
Steel belts7 lbs. per unit18 lbs. per unit

The purchase prices of rubber and steel are $3.2 and $4.2 perpound, respectively. The desired ending inventories of rubber andsteel belts are 33,000 and 7,000 pounds, respectively. Theestimated beginning inventories for rubber and steel belts are39,000 and 6,000 pounds, respectively.

Prepare a direct materials purchases budget for Safety GripCompany for the year ended December 31, 20Y9.

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y9
RubberSteel BeltsTotal
Pounds required for production:
Passenger tireslbs.lbs.
Truck tires
Total pounds availablelbs.lbs.
Total units purchasedlbs.lbs.
Unit pricex $x $
Total direct materials to be purchased$$$

Answer & Explanation Solved by verified expert
3.9 Ratings (399 Votes)

--Requirement, as asked

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y9
Rubber Steel Belts Total
Pounds required for production:
Passenger tires                875,000                          245,000          1,120,000
Truck tires                638,000                          198,000            836,000
Add: Desired ending inventory                  33,000                             7,000          1,956,000
Total pounds available             1,546,000                          450,000          3,912,000
Less: Beginning Inventories                  39,000                             6,000              45,000
Total units purchased             1,507,000                          444,000          3,867,000
Unit price $                  3.20 $                           4.20
Total direct materials to be purchased $     4,822,400.00 $               1,864,800.00 $ 6,687,200.00

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