Preparing a Direct Materials Purchases Budget
Tulum Inc. makes a Mexican chocolate mix sold in 4-pound boxes.Planned production in units for the first 3 months of the comingyear is:
| January | 24,700 |
| February | 22,000 |
| March | 30,200 |
Each box requires 4.2 pounds of chocolate mix and one box.Company policy requires that ending inventories of raw materialsfor each month be 10% of the next month’s production needs. Thatpolicy was met for the ending inventory of December in the prioryear. The cost of 1 pound of chocolate mix is $1.50. The cost ofone box is $0.10.
Required:
1. Calculate the ending inventory of chocolatemix in pounds for December of the prior year and for January andFebruary. What is the beginning inventory of chocolate mix forJanuary?
| Ending inventory for December | fill in the blank 1791c200405a046_1 pounds |
| Ending inventory for January | fill in the blank 1791c200405a046_2 pounds |
| Ending inventory for February | fill in the blank 1791c200405a046_3 pounds |
| Beginning inventory for January | fill in the blank 1791c200405a046_4 pounds |
2. Prepare a direct materials purchases budgetfor chocolate mix for the months of January and February.
| TulumInc. |
| Direct Materials Purchases Budget - Chocolate mix inPounds: |
| Forthe Months of January and February |
| January | February |
| Production in units | fill in the blank f5189304407200e_1 | fill in the blank f5189304407200e_2 |
| Pounds per unit | fill in the blank f5189304407200e_3 | fill in the blank f5189304407200e_4 |
| Pounds for production | fill in the blank f5189304407200e_5 | fill in the blank f5189304407200e_6 |
| Desired endinginventory | fill in the blank f5189304407200e_7 | fill in the blank f5189304407200e_8 |
| Needed | fill in the blank f5189304407200e_9 | fill in the blank f5189304407200e_10 |
| Less: Beginninginventory | fill in the blank f5189304407200e_11 | fill in the blank f5189304407200e_12 |
| Purchases | fill in the blank f5189304407200e_13 | fill in the blank f5189304407200e_14 |
| Price per pounds | $fill in the blank f5189304407200e_15 | $fill in the blank f5189304407200e_16 |
| Dollar purchases | $fill in the blank f5189304407200e_17 | $fill in the blank f5189304407200e_18 |
3. Calculate the ending inventory of boxes forDecember of the prior year and for January and February. Round youranswers to the nearest whole unit.
| Ending inventory for December | fill in the blank feb385003fcbfb9_1 units |
| Ending inventory for January | fill in the blank feb385003fcbfb9_2 units |
| Ending inventory for February | fill in the blank feb385003fcbfb9_3 units |
4. Prepare a direct materials purchases budgetfor boxes for the months of January and February.
| TulumInc. |
| Direct Materials Purchases Budget - Boxes |
| Forthe Months of January and February |
| January | February |
| Production in units | fill in the blank 1d53d301c01306a_1 | fill in the blank 1d53d301c01306a_2 |
| Boxes per unit | fill in the blank 1d53d301c01306a_3 | fill in the blank 1d53d301c01306a_4 |
| Boxes for production | fill in the blank 1d53d301c01306a_5 | fill in the blank 1d53d301c01306a_6 |
| Desired endinginventory | fill in the blank 1d53d301c01306a_7 | fill in the blank 1d53d301c01306a_8 |
| Needed | fill in the blank 1d53d301c01306a_9 | fill in the blank 1d53d301c01306a_10 |
| Less: Beginninginventory | fill in the blank 1d53d301c01306a_11 | fill in the blank 1d53d301c01306a_12 |
| Purchases | fill in the blank 1d53d301c01306a_13 | fill in the blank 1d53d301c01306a_14 |
| Price per box | $fill in the blank 1d53d301c01306a_15 | $fill in the blank 1d53d301c01306a_16 |
| Dollar purchases | $fill in the blank 1d53d301c01306a_17 | $fill in the blank 1d53d301c01306a_18 |
