Anticipated sales for Safety Grip Company were 68,000 passenger car tires and 20,000 truck tires. Rubber...

Anticipated sales for Safety Grip Company were 68,000 passenger car tires and 20,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows:

	Passenger Car	Truck
Rubber	31 lbs. per unit	72 lbs. per unit
Steel belts	7 lbs. per unit	18 lbs. per unit

The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The desired ending inventories of rubber and steel belts are 64,000 and 13,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 75,000 and 11,000 pounds, respectively.

Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9.

Expert Solution

Since details about production are not given, it is assumed sales units and budgeted production are same, if there is some difference, kindly comment with that information.

Direct Material Purchase Budget
	Rubber	Steel Belts	Total
Physical units Budget
To be used in production
Passenger Car	2108000	476000
Truck	1440000	360000
Add Target Ending Inventory	64000	13000
Total Requirements	3612000	849000
Deduct Beginning Inventory	75000	11000
Purchases to be made (Pounds)	3537000	838000
Cost per unit	$ 3.30	$ 4.30
Direct Materials to be Purchased	$ 11,672,100	$ 3,603,400	$ 15,275,500

ekkarill92 answered 2 years ago

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