Question

Direct Materials Purchases Budget

Pasadena Candle Inc. budgeted production of 740,000 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 17,400 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	?

Answer 1

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 (740000*10/16)	462500
Desired ending inventory, January 31	14500
Total units available	477000
Estimated beginning inventory, January 1	-17400
Total pounds to be purchased	459600
Unit price	2.1
Total direct materials to be purchased in January	965160