Question

Direct Materials Purchases Budget

Anticipated sales for Safety Grip Company were 50,000 passenger car tires and 15,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows:

	Passenger Car	Truck
Rubber	26 lbs. per unit	61 lbs. per unit
Steel belts	3 lbs. per unit	8 lbs. per unit

The purchase prices of rubber and steel are $3.2 and $4.2 per pound, respectively. The desired ending inventories of rubber and steel belts are 47,000 and 10,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 55,000 and 8,000 pounds, respectively.

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

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y8
	Rubber	Steel Belts	Total
Pounds required for production:
Passenger tires	lbs.	lbs.
Truck tires
Total pounds required	lbs.	lbs.
Total units purchased	lbs.	lbs.
Unit price	x $	x $
Total direct materials to be purchased	$	$	$

Answer 1

Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 2018
	Rubber	Steel Belts	Total
Pounds required for production:
Passenger tires	1300000	150000
Truck tires	915000	120000
Add: desired ending inventory	47000	10,000
Total	2262000	280000
Less estimated beginning inventory	55000	8000
Total units purchased	2207000	272000
Unit price	3.2	4.2
Total direct materials to be purchased	7062400	1142400	8204800

Working notes for the above answer is as under