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	43,000		$8.85		6,300		$17.20
February	60,000		$8.85		7,800		$17.20
March	83,000		$8.85		12,000		$17.20
April	115,000		$8.85		16,500		$17.20

FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 8,600 practice soccer balls and 1,260 match soccer balls.

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

Answer 1

Production budget for practice balls is as follows:
	Jan	Feb	Mar	Apr
Units	43,000	60,000	83,000	115,000
Add: Desired Ending Inventory	12,000	16,600	23,000
Total Required	55,000	76,600	106,000
Less: Beginning Inventory	8,600	12,000	16,600
Budgeted Production	46,400	64,600	89,400
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	March
Units produced	46,400	64,600	89,400
Direct materials per unit	0.5	0.5	0.5
Direct materials for production	23,200	32,300	44,700
Desired ending inventory	6,460	8,940
Total needed	29,660	41,240
Less: Beginning inventory	4,640	6,460
Direct materials purchases	25,020	34,780
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	March
Units produced	46,400	64,600	89,400
Direct materials per unit	1	1	1
Direct materials for production	46,400	64,600	89,400
Desired ending inventory	12,920	17,880
Total needed	59,320	82,480
Less: Beginning inventory	9,280	12,920
Direct materials purchases	50,040	69,560
Direct materials purchases budget for glue:
FlashKick Company
Direct Materials Purchases Budget - Glue
For January and February
Glue:	January	February	March
Units produced	46,400	64,600	89,400
Direct materials per unit	2	2	2
Direct materials for production	92,800	129,200
Desired ending inventory	25,840	-
Total needed	118,640	129,200
Less: Beginning inventory	18,560	25,840
Direct materials purchases	100,080	103,360