Question
In: Accounting
Preparing a Direct Materials Purchases Budget Tulum Inc. makes a Mexican chocolate mix sold in 4-pound...
Preparing a Direct Materials Purchases Budget
Tulum Inc. makes a Mexican chocolate mix sold in 4-pound boxes. Planned production in units for the first 3 months of the coming year is:
| January | 24,700 |
| February | 22,000 |
| March | 30,200 |
Each box requires 4.2 pounds of chocolate mix and one box. Company policy requires that ending inventories of raw materials for each month be 10% of the next month’s production needs. That policy was met for the ending inventory of December in the prior year. The cost of 1 pound of chocolate mix is $1.50. The cost of one box is $0.10.
Required:
1. Calculate the ending inventory of chocolate mix in pounds for December of the prior year and for January and February. What is the beginning inventory of chocolate mix for January?
| Ending inventory for December | fill in the blank 1791c200405a046_1 pounds |
| Ending inventory for January | fill in the blank 1791c200405a046_2 pounds |
| Ending inventory for February | fill in the blank 1791c200405a046_3 pounds |
| Beginning inventory for January | fill in the blank 1791c200405a046_4 pounds |
2. Prepare a direct materials purchases budget for chocolate mix for the months of January and February.
| Tulum Inc. | ||
| Direct Materials Purchases Budget - Chocolate mix in Pounds: | ||
| For the Months of January and February | ||
| January | February | |
| Production in units | fill in the blank f5189304407200e_1 | fill in the blank f5189304407200e_2 |
| Pounds per unit | fill in the blank f5189304407200e_3 | fill in the blank f5189304407200e_4 |
| Pounds for production | fill in the blank f5189304407200e_5 | fill in the blank f5189304407200e_6 |
| Desired ending inventory | fill in the blank f5189304407200e_7 | fill in the blank f5189304407200e_8 |
| Needed | fill in the blank f5189304407200e_9 | fill in the blank f5189304407200e_10 |
| Less: Beginning inventory | fill in the blank f5189304407200e_11 | fill in the blank f5189304407200e_12 |
| Purchases | fill in the blank f5189304407200e_13 | fill in the blank f5189304407200e_14 |
| Price per pounds | $fill in the blank f5189304407200e_15 | $fill in the blank f5189304407200e_16 |
| Dollar purchases | $fill in the blank f5189304407200e_17 | $fill in the blank f5189304407200e_18 |
3. Calculate the ending inventory of boxes for December of the prior year and for January and February. Round your answers to the nearest whole unit.
| Ending inventory for December | fill in the blank feb385003fcbfb9_1 units |
| Ending inventory for January | fill in the blank feb385003fcbfb9_2 units |
| Ending inventory for February | fill in the blank feb385003fcbfb9_3 units |
4. Prepare a direct materials purchases budget for boxes for the months of January and February.
| Tulum Inc. | ||
| Direct Materials Purchases Budget - Boxes | ||
| For the Months of January and February | ||
| January | February | |
| Production in units | fill in the blank 1d53d301c01306a_1 | fill in the blank 1d53d301c01306a_2 |
| Boxes per unit | fill in the blank 1d53d301c01306a_3 | fill in the blank 1d53d301c01306a_4 |
| Boxes for production | fill in the blank 1d53d301c01306a_5 | fill in the blank 1d53d301c01306a_6 |
| Desired ending inventory | fill in the blank 1d53d301c01306a_7 | fill in the blank 1d53d301c01306a_8 |
| Needed | fill in the blank 1d53d301c01306a_9 | fill in the blank 1d53d301c01306a_10 |
| Less: Beginning inventory | fill in the blank 1d53d301c01306a_11 | fill in the blank 1d53d301c01306a_12 |
| Purchases | fill in the blank 1d53d301c01306a_13 | fill in the blank 1d53d301c01306a_14 |
| Price per box | $fill in the blank 1d53d301c01306a_15 | $fill in the blank 1d53d301c01306a_16 |
| Dollar purchases | $fill in the blank 1d53d301c01306a_17 | $fill in the blank 1d53d301c01306a_18 |
Solutions
Expert Solution
1.
| Particulars | Dec Last Year | Jan | Feb |
| Ending Inventory | 10374 | 9240 | 12600 |
| Beginning Inventory | 10374 |
2
| Direct Material Purchase Budget - Chocolate Mix | ||||
| Particulars | Dec Last Year | Jan | Feb | Mar |
| Production in Units | 0 | 24700 | 22000 | 30000 |
| Pounds per Unit | 4.2 | 4.2 | 4.2 | 4.2 |
| Pounds for Production | 0 | 103740 | 92400 | 126000 |
| Desired Ending inventory needed | 10374 | 9240 | 12600 | 0 |
| Less Beginning Inventory | 0 | 10374 | 9240 | 12600 |
| Purchases | 10374 | 102606 | 95760 | 113400 |
| Price in Pounds | $1.50 | $1.50 | $1.50 | $1.50 |
| Dollars Purchase | $15,561 | $1,53,909 | $1,43,640 | $1,70,100 |
3.
| Particulars | Dec Last Year | Jan | Feb |
| Ending Inventory | 2470 | 2200 | 3000 |
4.
| Direct Material Purchase Budget - Box | ||||
| Particulars | Dec Last Year | Jan | Feb | Mar |
| Production in Units | 0 | 24700 | 22000 | 30000 |
| Boxes per unit | 1 | 1 | 1 | 1 |
| Boxes for production | 0 | 24700 | 22000 | 30000 |
| Desired Ending inventory needed | 2470 | 2200 | 3000 | 0 |
| Less Beginning Inventory | 0 | 2470 | 2200 | 3000 |
| Purchases | 2470 | 24430 | 22800 | 27000 |
| Price per box | $0.10 | $0.10 | $0.10 | $0.10 |
| Dollars Purchase | $247 | $2,443 | $2,280 | $2,700 |
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