Question

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	$

Answer 1

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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