Question

Direct Materials Purchases Budget

Anticipated sales for Safety Grip Company were 51,000 passenger car tires and 15,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:

	Passenger Car	Truck
Rubber	27 lbs. per unit	63 lbs. per unit
Steel belts	3 lbs. per unit	8 lbs. per unit

The purchase prices of rubber and steel are $3.3 and $4.3 per pound, respectively. The desired ending inventories of rubber and steel belts are 48,000 and 10,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 56,000 and 8,000 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	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, 20Y9
	Rubber	Steel Belts	Total
Pounds required for production:
Passenger tires	1377000	153000
Truck tires	945000	120000
Desired inventory, December 31, 20Y9	48000	10000
Total	2370000	283000
Estimated inventory, January 1, 20Y9	56000	8000
Total units purchased	2314000	275000
Unit price	3.3	4.3
Total direct materials to be purchased	7636200	1182500	8818700