Question

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	45,000		$8.60		6,900		$17.00
February	58,000		$8.60		7,700		$17.00
March	81,000		$8.60		12,500		$17.00
April	105,000		$8.60		17,000		$17.00

FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 9,000 practice soccer balls and 1,380 match soccer balls.

Every practice ball requires 0.5 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
Direct materials per unit
Direct materials for production
Desired ending inventory
Total needed
Less: Beginning inventory
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
Direct materials per unit
Direct materials for production
Desired ending inventory
Total needed
Less: Beginning inventory
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
Direct materials per unit
Direct materials for production
Desired ending inventory
Total needed
Less: Beginning inventory
Direct materials purchases

Answer 1

Production Budget
	Jan	Feb	Mar
Budgeted Sales units	45,000	58,000	81,000
Add: Desired Ending Inventory	11,600	16,200	21,000
Total required	56,600	74,200	102,000
Less: Beginning Inventory	9,000	11,600	16,200
Budgeted Production	47,600	62,600	85,800
FlashKick Company
Direct Materials Purchases Budget - Polyvinyl Chloride Panels
For January and February
Polyvinyl chloride panels:	January	February	Mar
Units produced	47,600	62,600	85,800
Direct materials per unit	0.5	0.5	0.5
Direct materials for production	23,800	31,300	42,900
Desired ending inventory	6,260	8,580
Total needed	30,060	39,880
Less: Beginning inventory	4,760	6,260
Direct materials purchases	25,300	33,620
lashKick Company
Direct Materials Purchases Budget - Bladder and Valve
For January and February
Bladder and valve:	January	February	Mar
Units produced	47,600	62,600	85,800
Direct materials per unit	1	1	1
Direct materials for production	47,600	62,600	85,800
Desired ending inventory	12,520	17,160
Total needed	60,120	79,760
Less: Beginning inventory	9,520	12,520
Direct materials purchases	50,600	67,240
Direct materials purchases budget for glue:
FlashKick Company
Direct Materials Purchases Budget - Glue
For January and February
Glue:	January	February	Mar
Units produced	47,600	62,600	85,800
Direct materials per unit	3	3	3
Direct materials for production	142,800	187,800	257,400
Desired ending inventory	37,560	51,480
Total needed	180,360	239,280
Less: Beginning inventory	28,560	37,560
Direct materials purchases	151,800	201,720