Question

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	$	$	$

Answer 1

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