Question

Direct Materials Purchases Budget

Anticipated sales for Solid Grip Company were 38,000 passenger car tires and 24,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows:

	Passenger Car	Truck
Rubber	36 lb. per unit	80 lb. per unit
Steel belts	6 lb. per unit	10 lb. per unit

The purchase prices of rubber and steel are $1.40 and $0.90 per pound, respectively. The desired ending inventories of rubber and steel belts are 35,000 and 12,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 40,000 and 10,000 pounds, respectively.

Prepare a direct materials purchases budget for Solid Grip Company for the year ended December 31, 20Y8. When required, enter unit prices to the nearest cent.

Solid Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y8
	Rubber	Steel Belts	Total
Pounds required for production:
Passenger tires	fill in the blank 1lb.	fill in the blank 2lb.
Truck tires	fill in the blank 3	fill in the blank 4
	fill in the blank 6	fill in the blank 7
Total pounds required	fill in the blank 8lb.	fill in the blank 9lb.
	fill in the blank 11	fill in the blank 12
Total pounds to be purchased	fill in the blank 13lb.	fill in the blank 14lb.
Unit price	x $fill in the blank 15	x $fill in the blank 16
Total direct materials to be purchased	$fill in the blank 17	$fill in the blank 18	$fill in the blank 19

2)

Direct Labor Cost Budget

Rip Court Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for March for the two rackets is as follows:

	Junior	Pro Striker
Production budget	3,400 units	9,600 units

Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:

	Forming Department	Assembly Department
Junior	0.10 hour per unit	0.20 hour per unit
Pro Striker	0.15 hour per unit	0.25 hour per unit

The direct labor rate for each department is as follows:

Forming Department	$18.00 per hour
Assembly Department	$16.00 per hour

Prepare the direct labor cost budget for March.

Rip Court Racket Company
Direct Labor Cost Budget
For the Month Ending March 31
	Forming Department	Assembly Department
Hours required for production:
Junior	fill in the blank 1	fill in the blank 2
Pro Striker	fill in the blank 3	fill in the blank 4
Total hours required	fill in the blank 5	fill in the blank 6
Hourly rate	x $fill in the blank 7	x $fill in the blank 8
Total direct labor cost	$fill in the blank 9	$fill in the blank 10

Answer 1