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		$8.70		6,800		$16.20
February	57,000		$8.70		8,400		$16.20
March	85,000		$8.70		12,500		$16.20
April	110,000		$8.70		16,500		$16.20

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 0.5 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 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
Direct materials for production
Desired ending inventory
Total needed
Less: Beginning inventory
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 per unit
Direct materials for production
Desired ending inventory
Total needed
Less: Beginning inventory
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 per unit
Direct materials for production
Desired ending inventory
Total needed
Less: Beginning inventory
Direct materials purchases

Answer 1

		FlashKick Company
		Direct Materials Purchases Budget - Polyvinyl Chloride Panels					Production Budget for Practice Balls:
		For January and February						January	February	March	April
		Polyvinyl chloride panels:	January	February	March		Units Sales	41000	57000	85000	110000
		Units produced	44200	62600	90000		Desired ending inventory(20% of Next Month Sales)	11400	17000	22000
		Direct materials for production	0.50	0.50	0.50		Total needed	52400	74000	107000
		Direct materials for production	22100	31300	45000		Less: Beginning inventory	8200	11400	17000
		Desired ending inventory(20% of Next Month Requirment)	6260	9000			Production to be done	44200	62600	90000
		Total needed	28360	40300
		Less: Beginning inventory	4420	6260
		Direct materials purchases	23940	34040
		FlashKick Company
		Direct Materials Purchases Budget - Bladder and Valve
		For January and February
		Polyvinyl chloride panels:	January	February	March
		Units produced	44200	62600	90000
		Direct materials for production	1.00	1.00	1.00
		Direct materials for production	44200	62600	90000
		Desired ending inventory(20% of Next Month Requirment)	12520	18000
		Total needed	56720	80600
		Less: Beginning inventory	8840	12520
		Direct materials purchases	47880	68080
		FlashKick Company
		Direct Materials Purchases Budget - Glue
		For January and February
		Polyvinyl chloride panels:	January	February	March
		Units produced	44200	62600	90000
		Direct materials for production	3.00	3.00	3.00
		Direct materials for production	132600	187800	270000
		Desired ending inventory(20% of Next Month Requirment)	37560	54000
		Total needed	170160	241800
		Less: Beginning inventory	26520	37560
		Direct materials purchases	143640	204240