Question

Direct Materials Purchases Budget

FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKick’s best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following:

	Practice Balls				Match Balls
	Units		Selling Price		Units		Selling Price
January	41,000		$8.80		6,800		$16.30
February	55,000		$8.80		7,900		$16.30
March	80,000		$8.80		12,000		$16.30
April	110,000		$8.80		16,000		$16.30

FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 8,200 practice soccer balls and 1,360 match soccer balls.

Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 2 ounces of glue. FlashKick’s policy is that 20 percent of the following month’s production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement.

Required:

Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. If required, round your answers to the nearest cent.

Direct materials purchases budget for polyvinyl chloride panels:

FlashKick Company
Direct Materials Purchases Budget - Polyvinyl Chloride Panels
For January and February
Polyvinyl chloride panels:	January	February
Units produced
Direct materials for production
Total needed
Direct materials purchases

Direct materials purchases budget for bladder and valve:

FlashKick Company
Direct Materials Purchases Budget - Bladder and Valve
For January and February
Bladder and valve:	January	February
Units produced
Direct materials for production
Total needed
Direct materials purchases

Direct materials purchases budget for glue:

FlashKick Company
Direct Materials Purchases Budget - Glue
For January and February
Glue:	January	February
Units produced
Direct materials for production
Total needed
Direct materials purchases

Answer 1

Production Budget
Match Balls	January	February	March
Sales	6,800.00	7,900.00	12,000.00
Add closing Stock	1,580.00	2,400.00	3,200.00
Less OpeningStock	1360.00	1,580.00	2,400.00
Production	7,020.00	8,720.00	12,800.00
Practice Balls	January	February	March
Sales	41,000.00	55,000.00	80,000.00
Add closing Stock	11,000.00	16,000.00	22,000.00
Less OpeningStock	8200.00	11,000.00	16,000.00
Production	43,800.00	60,000.00	86,000.00
Requirementsfor Each practice ball
polyvinyl chloride panels	0.7 square yard
bladder with valve (to fill with air)	one
glue	2 ounces
Purchase Budget for PRACTICE BALL
Polyvinyl chloride panels	January	February
Requirement(Production*0.7square Yards )	30,660.00	42,000.00
Add closing Stock	8,400.00	12,040.00
Less OpeningStock	6132.00	8,400.00
Production	32,928.00	45,640.00
Bladder with valve (to fill with air)	January	February
Requirement (Production*1 unit)	43,800.00	60,000.00
Add closing Stock	12,000.00	17,200.00
Less OpeningStock	8760.00	12,000.00
Production	47,040.00	65,200.00
Glue	January	February
Requirement(Production*2 ounces)	87,600.00	1,20,000.00
Add closing Stock	24,000.00	34,400.00
Less OpeningStock	17520.00	24,000.00
Production	94,080.00	1,30,400.00