Question

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Direct Materials Purchases Budget Anticipated sales for Safety Grip Company were 36,000 passenger car tires and 11,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table Truck Passenger Car Rubber Steel belts 5 lbs. per unit 13 lbs. per unit The purchase prices of rubber and steel are $2.8 and $3.7 per pour l respectively The desire 29 ibs. per unit 68 lbs. per unit en ingin entres of rub e r and teel belts are 000 in 7,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 40,000 and 6,000 pounds, respectively. Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20y9. Safety Grip Company Direct Materials Purchases Budget For the Year Ending December 31, 20Y9 Total Rubber Pounds required for production: Passenger tires Truck tires Next Previous Check My Work 5 more Check My Work uses remaining 4:50 PM

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Answer 1

question 1

Safety Grip Company
Direct Materials Purchase Budget
For the Year Ended December 31, 20Y9
	Rubber	Steel Belts	Total
Pounds required for produced
Passenger tires	1,044,000*	180,000**
Truck tires	748,000***	143,000****
Plus: Desired inventory, December 31, 20Y9	34,000	7,000
Total	1,826,000	330,000
Less: Estimated inventory, January 1, 20Y9	40,000	6,000
Total units purchased         (a)	1,786,000	324,000
unit price                              (b)	$2.80	$3.70
Total direct materials to be purchased (a x b)	$5,000,800	$1,198,800	$6,199,600

*1,044,000 = 36,000 units x 29 pounds per unit

**180,000 = 36,000 units x 5 pounds per unit

***748,000 = 11,000 units x 68 pounds per unit

****143,000 = 11,000 units x 13 pounds per unit

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Question 2

Deleware Chemical Company
Cost of Goods Sold Budget
For the Month Ending June 30
Finished goods inventory, June 1                    [P1 + P2 = $11,400 + $9,700]			$21,100
Work in process inventory, June 1		$14,100
Direct materials:
Direct materials inventory, June 1               [Oil]	$17,000
Direct materials purchases                 [31,100 barrels x $71 per barrel]	$2,208,100
Cost of direct materials available for use	$2,225,100
Less: Direct materials inventory, June 30         [Oil]	$18,700
Cost of direct materials placed in production	$2,206,400
Direct labor	$242,900
Factory overhead	$397,500
Total manufacturing costs                                  [Direct materials used + Direct labor + Factory overhead]		$2,846,800
Total work in Process during the period               [Work in process inventory, June 1 + Total manufacturing costs]		$2,860,900
Less: Work in process inventory, June 30		$14,600
Cost of Goods Manufactured			$2,846,300
Cost of finished goods available for sale			$2,867,400
Less: Finished goods inventory, June 30      [P1 + P2 = $10,400 + $9,200]			$19,600
Cost of goods sold			$2,847,800