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    48,000 $8.55 6,000 $16.00

February 61,000 $8.55 7,900 $16.00

March 86,000 $8.55    13,500 $16.00

April 115,000 $8.55 16,500 $16.00

FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 9,600 practice soccer balls and 1,200 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 per unit ______    _______

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

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For Direct Material Budget, we will need Production Budget for Practice Ball:
		Jan	Feb	Mar	April
Budgeted Unit Sale		48000	61000	86000	115000
Add: Desired Ending Inventory		12200	17200	23000
Balls needed		60200	78200	109000
Less: Beginning Inventory		-9600	-12200	-17200
Budgeted Production of units		50600	66000	91800
Direct materials purchases budget for polyvinyl chloride panels
		January	February	March
Units produced		50600	66000	91800
Direct materials per unit		0.5	0.5	0.5
Direct materials for production		25300	33000	45900
Desired ending inventory		6600	9180
Total needed		31900	42180
Less: Beginning inventory	25300*20%	-5060	-6600
Direct materials purchases		26840	35580
Direct materials purchases budget for bladder and valve:
		January	February	March
Units produced		50600	66000	91800
Direct materials per unit		1	1	1
Direct materials for production		50600	66000	91800
Desired ending inventory		13200	18360
Total needed		63800	84360
Less: Beginning inventory	50600*20%	-10120	-13200
Direct materials purchases		53680	71160
Direct materials purchases budget for glue
		January	February	March
Units produced		50600	66000	91800
Direct materials per unit		3	3	3
Direct materials for production		151800	198000	275400
Desired ending inventory		39600	55080
Total needed		191400	253080
Less: Beginning inventory	151800*20%	-30360	-39600
Direct materials purchases		161040	213480