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Purple Co.'s production budget for Product X for the year ended December 31 is as follows: Product...

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Accounting

Purple Co.'s production budget for Product X for the year endedDecember 31 is as follows:

Product X
Sales (in units)640,000
Plus desired ending inventory85,000
Total725,000
Less estimated beginning inventory, January 190,000
Total production635,000

In Purple's production operations, Materials A, B, and C arerequired to make Product X.

The quantities of direct materials expected to be used for eachunit of product are as follows:

Material A0.50 lb. per unit
Material B1.00 lb. per unit
Material C1.20 lb. per unit

The prices of direct materials are as follows:

Material A$0.60 per lb.
Material B$1.70 per lb.
Material C$1.00 per lb.

Prepare a direct materials purchases budget for Product X,assuming that there are no beginning or ending inventories fordirect materials (all units purchased are used in production).

Direct Materials
ABCTotal
Units required for production of Product Xlb.lb.lb.
Unit price$$$
Total direct materials purchases$$$

Answer & Explanation Solved by verified expert
4.1 Ratings (485 Votes)

Solution

Material
A B C Total
Units required for production of Product X 317500 635000 762000
Unit price $               0.60 $                   1.70 $               1.00
Total direct materials purchases $ 190,500.00 $ 1,079,500.00 $ 762,000.00 $ 2,032,000.00

Working

Material
A B C Total
Units to be produced 635000 635000 635000
Multiplied by: Pounds required per unit produced 0.5 1 1.2
Units required for production of Product X 317500 635000 762000
Multiplied by: Unit price $               0.60 $                   1.70 $               1.00
Total direct materials purchases $ 190,500.00 $ 1,079,500.00 $ 762,000.00 $ 2,032,000.00

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