Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 735,000 candles for the January. Wax is required to produce a candle. Assume 11 ounces of wax is required for each candle. The estimated January 1 wax inventory is 18,700 pounds. The desired January 31 wax inventory is 12,500 pounds. If candle wax costs $1.60 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 $
DIRECT MATERIAL PURCHASE BUDGET FOR THE MONTH ENDING JANUARY 31 |
|
Budgeted production in candles | 735000 |
Pounds of wax required for candle | .6875 |
Total pounds required for production (735000*.6875) | 505313 |
Add:Desired ending inventory | 12500 |
Total units available | 517813 |
less:Beginning inventory | -18700 |
Raw material (wax) needs to be purchased | 499113 |
cost per pound | 1.6 |
Total cost of direct material purchased (499113*1.6) | 798581 |
**1 pound = 16 ounces or 1Ounce = 1/16
so Pounds of wax required per candle = 11*1/16 =
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