Question

1. 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	50,000		$8.75		7,000		$16.00
   February	58,000		$8.75		7,500		$16.00
   March	80,000		$8.75		13,000		$16.00
   April	100,000		$8.75		18,000		$16.00

   Every practice ball requires 0.7 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( answer options below)
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Direct materials for production (answer option)
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Total needed (aqnswer option)
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Direct materials purchases

   Feedback

   The direct materials purchases budget is similar in format to the production budget; it is based on the amount of materials needed for production and the inventories of direct materials. The purchases amount can be determined by considering beginning and ending (desired) inventory amounts. Also, consider expected usage.

   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
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Direct materials for production
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Total needed
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Direct materials purchases

   Feedback

   The direct materials purchases budget is similar in format to the production budget; it is based on the amount of materials needed for production and the inventories of direct materials. Purchases = Expected usage +Desired ending inventory of direct materials – Beginning inventory of direct materials

   Direct materials purchases budget for glue:

   FlashKick Company
   Direct Materials Purchases Budget - Glue
   For January and February
   Glue:	January	February
   Units produced
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Direct materials for production
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Total needed
   Desired ending inventory Direct materials for production Direct materials per unit Direct materials purchases Less: Beginning inventory Units produced
   Direct materials purchases

Answer 1

Production Budget (Practice Balls)
	January	February	March
Sales units	50000	58000	80000
Add : Closing Stock Required	11600	16000	20000
Total Goods Required	61600	74000	100000
Less : Opening Stock	3100	11600	16000
Production Required	58500	62400	84000

Ending Inventory is 20% of next months sales units

Direct Material Budget (Polyvinyl Chloride Panels)
	January	February	March
Production Required	58500	62400	84000
Raw Material Per unit (Sq Yard)	0.7	0.7	0.7
Raw Material for Production	40950	43680	58800
Add : Closing Stock Required	17472	23520
Total Material Required	58422	67200
Less : Opening Stock	8190	17472
Raw material to be purchased	50232	49728

Ending Inventory is 20% of next months material requirements for production, Beginning Inventory is 20% of current months material requirements for production.

Direct Material Budget (Bladder and Valve)
	January	February	March
Production Required	58500	62400	84000
Raw Material Per unit	1	1	1
Raw Material for Production	58500	62400	84000
Add : Closing Stock Required	24960	33600
Total Material Required	83460	96000
Less : Opening Stock	11700	24960
Raw material to be purchased (Units)	71760	71040

Direct Material Budget (Glue)
	January	February	March
Production Required	58500	62400	84000
Raw Material Per unit (Ounces)	3	3	3
Raw Material for Production	175500	187200	252000
Add : Closing Stock Required	74880	100800
Total Material Required	250380	288000
Less : Opening Stock	35100	74880
Raw material to be purchased (Ounces)	215280	213120