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	44,000		$8.55		6,000		$16.60
February	56,000		$8.55		7,900		$16.60
March	82,000		$8.55		12,000		$16.60
April	110,000		$8.55		17,000		$16.60

FlashKick requires ending inventory of product to equal 20 percent of the next month’s unit sales. Beginning inventory in January was 8,800 practice soccer balls and 1,200 match soccer balls.

Every practice ball requires 0.7 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 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

Direct Material Purchase Budget is as prepared below:

	January	February	March	April
Sales	44,000	56,000	82,000	110,000
Add: Ending Inventory	11,200	16,400	22000
Less: Beginning Inventory	8,800	11,200	16,400
Total production	46,400	61,200	87,600
FlashKick Company
Direct Materials Purchases Budget - Polyvinyl Chloride Panels
For January and February
Polyvinyl chloride panels:	January	February	March
Units produced	46,400	61,200	87,600
* square yard of polyvinyl chloride panels	0.7	0.7	0.7
Direct materials for production	32,480	42,840	61320
Add: Ending raw material	8,568	12,264
Total needed	41,048	55,104
Less: Beginning raw material	6,496	8,568
Direct materials purchases	34,552	46,536
FlashKick Company
Direct Materials Purchases Budget - Bladder and Valve
For January and February
Bladder and valve:	January	February	March
Units produced	46,400	61,200	87,600
* bladder with valve required	1	1	1
Direct materials for production	46,400	61,200	87600
Add: Ending raw material	12,240	17,520
Total needed	58,640	78,720
Less: Beginning raw material	9,280	12,240
Direct materials purchases	49,360	66,480
FlashKick Company
Direct Materials Purchases Budget - Glue
For January and February
Glue:	January	February	March
Units produced	46,400	61,200	87,600
* glue required	3	3	3
Direct materials for production	139,200	183,600	262800
Add: Ending raw material	36,720	52,560
Total needed	175,920	236,160
Less: Beginning raw material	27,840	36,720
Direct materials purchases	148,080	199,440