Question

Direct Materials Purchases Budget

Anticipated sales for Safety Grip Company were 35,000 passenger car tires and 11,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:

	Passenger Car	Truck
Rubber	25 lbs. per unit	58 lbs. per unit
Steel belts	7 lbs. per unit	18 lbs. per unit

The purchase prices of rubber and steel are $3.2 and $4.2 per pound, respectively. The desired ending inventories of rubber and steel belts are 33,000 and 7,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 39,000 and 6,000 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

--Requirement, as asked

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y9
	Rubber	Steel Belts	Total
Pounds required for production:
Passenger tires	875,000	245,000	1,120,000
Truck tires	638,000	198,000	836,000
Add: Desired ending inventory	33,000	7,000	1,956,000
Total pounds available	1,546,000	450,000	3,912,000
Less: Beginning Inventories	39,000	6,000	45,000
Total units purchased	1,507,000	444,000	3,867,000
Unit price	$                  3.20	$                           4.20
Total direct materials to be purchased	$     4,822,400.00	$               1,864,800.00	$ 6,687,200.00