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	48,000		$8.75		6,600		$17.00
February	57,000		$8.75		7,500		$17.00
March	88,000		$8.75		12,500		$17.00
April	100,000		$8.75		16,000		$17.00

FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 9,600 practice soccer balls and 1,320 match soccer balls.

Every practice ball requires 0.6 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 2 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 for production
Total needed
Direct materials purchases

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 for production
Total needed
Direct materials purchases

Direct materials purchases budget for glue:

FlashKick Company
Direct Materials Purchases Budget - Glue
For January and February
Glue:	January	February
Units produced
Direct materials for production
Total needed
Direct materials purchases

Answer 1

Production Budget - Practice Balls
	January	February	March
Unit sales (given)	48,000.00	57,000.00	88,000.00
Desired ending inventory ( 20% of Next Month Sales)	11,400.00	17,000.00	20,000.00
Total needed	59,400.00	74,000.00	108,000.00
Beg Inventory	(9,600.00)	(11,400.00)	17,000.00
Units produced	49,800.00	62,600.00	125,000.00
* Ening Inventory for Feb: 10000X20%=20000
FlashKick Company
Direct Materials Purchases Budget - Polyvinyl Chloride Panels
For January and February
Polyvinyl chloride panels:	January	February	March
Units produced (a)	49,800.00	62,600.00	125,000.00
Raw material Require   for production one unit (b)	0.60	0.60	0.60
Total raw material require (c=aXb)	29,880.00	37,560.00	75,000.00
Desired ending inventory ( 20% of Next Month Prouction) (d)	7,512.00	15,000.00
Total needed (c+d)	37,392.00	52,560.00
Less: Beg Inventory	5,976.00	7,512.00
Direct materials purchases	31,416.00	45,048.00
FlashKick Company
Direct Materials Purchases Budget - Bladers & Valves
For January and February
Bladder & Valves	January	February	March
Units produced (a)	49,800.00	62,600.00	125,000.00
Raw material Require   for production of One unit (b)	1.00	1.00	1.00
Total raw material require (c=aXb)	49,800.00	62,600.00	125,000.00
Desired ending inventory ( 20% of Next Month Prouction) (d)	12,520.00	25,000.00
Total needed (c+d)	62,320.00	87,600.00
Less: Beg Inventory	9,960.00	12,520.00
Direct materials purchases	52,360.00	75,080.00
FlashKick Company
Direct Materials Purchases Budget - Glues
For January and February
Glues	January	February	March
Units produced (a)	49,800.00	62,600.00	125,000.00
Raw material Require   for production of One unit (b)	2.00	2.00	2.00
Total raw material require (c=aXb)	99,600.00	125,200.00	250,000.00
Desired ending inventory ( 20% of Next Month Prouction) (d)	25,040.00	50,000.00
Total needed (c+d)	124,640.00	175,200.00
Less: Beg Inventory	19,920.00	25,040.00
Direct materials purchases	104,720.00	150,160.00