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In: Accounting

Direct Materials Purchases Budget Anticipated sales for Safety Grip Company were 44,000 passenger car tires and...

Direct Materials Purchases Budget

Anticipated sales for Safety Grip Company were 44,000 passenger car tires and 13,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows:

Passenger Car Truck
Rubber 26 lbs. per unit 61 lbs. per unit
Steel belts 7 lbs. per unit 18 lbs. per unit

The purchase prices of rubber and steel are $3.40 and $4.50 per pound, respectively. The desired ending inventories of rubber and steel belts are 41,000 and 9,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 48,000 and 7,000 pounds, respectively.

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

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y9
Rubber Steel Belts Total
Pounds required for production:
Passenger tires lbs. lbs.
Truck tires
Total pounds available lbs. lbs.
Total units purchased lbs. lbs.
Unit price x $ x $
Total direct materials to be purchased $ $ $

Solutions

Expert Solution

Direct material purchases budget
Rubber Steel Belts Total
Pounds required for production
Passenger tires(44000*26 lbs)(44000*7 lbs)      11,44,000               3,08,000
Truck tires(13000*61 lbs)(13000*18 lbs)        7,93,000               2,34,000
Desired ending inventory           41,000                    9,000
Total pounds available      19,78,000               5,51,000
Less: Beginning inventory         -48,000                   -7,000
Total Units purchased      19,30,000               5,44,000
Unit price $ 3.4 $ 4.5
Total direct materials to be purchased $ 65,62,000 $ 24,48,000 $90,10,000

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