Question

Direct Materials Purchases Budget

Anticipated sales for Safety Grip Company were 39,000 passenger car tires and 12,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:

	Passenger Car	Truck
Rubber	26 lbs. per unit	61 lbs. per unit
Steel belts	3 lbs. per unit	8 lbs. per unit

The purchase prices of rubber and steel are $3.2 and $4.2 per pound, respectively. The desired ending inventories of rubber and steel belts are 37,000 and 8,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 43,000 and 6,000 pounds, respectively.

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

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y9
	Rubber	Steel Belts	Total
Pounds required for production:
Passenger tires	lbs.	lbs.
Truck tires
Desired inventory, December 31, 20Y9
Total pounds available	lbs.	lbs.
Estimated inventory, January 1, 20Y9
Total units purchased	lbs.	lbs.
Unit price	x $	x $
Total direct materials to be purchased	$	$	$

Answer 1

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 2019
		Rubber		Steel Belts		Total
Pounds required for production:
Passenger tires		1014000		117000
Truck tires		732000		96000
Plus desired ending inventory		37000		8000
Total		1783000		221000
Less estimated beginning inventory		-43000		-6000
Total units purchased		1740000		215000
Unit price		3.2		4.2
Total direct materials to be purchased		$    5,568,000.00		$     903,000.00		$ 6,471,000.00