Question

Anticipated sales for Safety Grip Company were 32,000 passenger car tires and 10,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows: Passenger Car Truck Rubber 28 lbs. per unit 65 lbs. per unit Steel belts 3 lbs. per unit 8 lbs. per unit The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The desired ending inventories of rubber and steel belts are 30,000 and 7,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 35,000 and 5,000 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 Total pounds available lbs. lbs. Total units purchased lbs. lbs. Unit price x $ x $ Total direct materials to be purchased $ $

Answer 1

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 Car tires	896000	96000
Truck tires	650000	80000
Desired ending inventory	30000	7000
Total pounds needed	1576000	183000
Less: Beginning inventory	-35000	-5000
Total units purchased	1541000	178000
Unit price	3.3	4.3
Total direct materials to be purchased	5085300	765400	5850700