Question

Anticipated sales for Sure Grip Tire Company were 47,000 passenger car tires and 14,000 truck tires....

Anticipated sales for Sure Grip Tire Company were 47,000 passenger car tires and 14,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:

Passenger Car Truck
Rubber 32 lbs. per unit 75 lbs. per unit
Steel belts 7 lbs. per unit 18 lbs. per unit

The purchase prices of rubber and steel are $3.4 and $4.5 per pound, respectively. The desired ending inventories of rubber and steel belts are 44,000 and 9,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 52,000 and 7,000 pounds, respectively.

Prepare a direct materials purchases budget for Sure Grip Tire Company for the year ended December 31, 2016. When required, enter unit prices to the nearest cent.

Sure Grip Tire Company
Direct Materials Purchases Budget
For the Year Ending December 31, 2016
Rubber Steel Belts Total
Pounds required for production:
Passenger tires lbs. lbs.
Truck tires
Total lbs. lbs.
Total units purchased lbs. lbs.
Unit price x $ x $
Total direct materials to be purchased $ $ $

Homework Answers

Answer #1
Sure Grip Tire Company
Direct Materials Purchases Budget
For the Year Ending December 31, 2016
Rubber Steel Belts Total
Pounds required for production:
Passenger tires 1504000 329000
Truck tires 1050000 252000
Add: Desired ending inventories 44000 9000
Total 2598000 590000
Less: Estimated beginning inventories 52000 7000
Total units purchased 2546000 583000
Unit price 3.4 4.5
Total direct materials to be purchased 8656400 2623500 11279900
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