Question

Direct Materials Purchases Budget

Pasadena Candle Inc. budgeted production of 735,000 candles for the year. Wax is required to produce a candle. Assume 12 ounces of wax is required for each candle. The estimated January 1 wax inventory is 17,900 pounds. The desired December 31 wax inventory is 12,800 pounds. If candle wax costs $2.10 per pound, determine the direct materials purchases budget for the year. (One pound = 16 ounces.) Round all computed answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Pasadena Candle Inc.
Direct Materials Purchases Budget
For the Year Ending December 31
Pounds of wax required for production:
Candles
Desired ending inventory, December 31
Total units available
Estimated beginning inventory, January 1
Total pounds to be purchased
Unit price	$
Total direct materials to be purchased	$

Answer 1

Direct materials purchases budget for the year is as prepared below:

Pasadena Candle Inc.
Direct Materials Purchases Budget
For the Year Ending December 31
Pounds of wax required for production:
Candles	8,820,000
Desired ending inventory, December 31	204,800
Total units available	9,024,800
Estimated beginning inventory, January 1	-286,400
Total pounds to be purchased	8,738,400
Unit price	2
Total direct materials to be purchased	18,350,640