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Pasadena Candle Inc. budgeted production of 780,000 candles for the year. Wax is required to produce...

Pasadena Candle Inc. budgeted production of 780,000 candles for the year. Wax is required to produce a candle. Assume 10 ounces of wax is required for each candle. The estimated January 1 wax inventory is 16,800 pounds. The desired December 31 wax inventory is 14,300 pounds. If candle wax costs $1.60 per pound, determine the direct materials purchases budget for the year. (One pound = 16 ounces.) Round all computed answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Pasadena Candle Inc.
Direct Materials Purchases Budget
For the Year Ending December 31
Pounds of wax required for production:
Total units available
Total pounds to be purchased
Unit price $
Total direct materials to be purchased $

Solutions

Expert Solution

Direct Material Purchase Budget For The Year December 31
Particulars Amount $
Pounds required for production:     487,500.00
     (780000 Candles * 10 Ounces / 16)
Add: Desired december 31 Wax inventory       14,300.00
Total units available     501,800.00
Less: Inventory on January 1       16,800.00
Total pounds to be purchased     485,000.00
Unit price                 1.60
Total direct materials to be purchased     776,000.00

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