Question

# Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 700,000 candles for the January. Wax...

Direct Materials Purchases Budget

Pasadena Candle Inc. budgeted production of 700,000 candles for the January. Wax is required to produce a candle. Assume 10 ounces of wax is required for each candle. The estimated January 1 wax inventory is 18,400 pounds. The desired January 31 wax inventory is 14,500 pounds. If candle wax costs \$2.10 per pound, determine the direct materials purchases budget for January. (One pound = 16 ounces.) Round all computed answers to the nearest whole number. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

 Pasadena Candle Inc. Direct Materials Purchases Budget For the Month Ending January 31 Pounds of wax required for production: Candles Desired ending inventory, January 31 Total units available Estimated beginning inventory, January 1 Total pounds to be purchased Unit price \$ Total direct materials to be purchased in January \$

Solution

 Pasadena Candle Inc. Direct Materials Purchases Budget For the Month Ending January 31 Pounds of wax required for production: Candles 437500 Desired ending inventory, January 31 14500 Total units available 452000 Estimated beginning inventory, January 1 -18400 Total pounds to be purchased 433600 Unit price \$          2.10 Total direct materials to be purchased in January \$910,560.00

Total ounces required for production= 700000 units x 10= 7,000,000 ounce

Pounds required for ptoduction= 7,000,000/16=437,500 pounds