Question

Purple Co.'s production budget for Product X for the year ended December 31 is as follows: Product X Sales (in units) 640,000 Plus desired ending inventory 85,000 Total 725,000 Less estimated beginning inventory, January 1 90,000 Total production 635,000 In Purple's production operations, Materials A, B, and C are required to make Product X. The quantities of direct materials expected to be used for each unit of product are as follows: Material A Material B Material C 0.50 lb. per unit 1.00 lb. per unit 1.20 lb. per unit The prices of direct materials are as follows: Material A $0.60 per lb. Material B $1.70 per lb. Material C $1.00 per lb. Prepare a direct materials purchases budget for Product X, assuming that there are no beginning or ending inventories for direct materials (all units purchased are used in production).

Answer 1

Answer

--Requirement

	A	B	C	Total
Units required for production of Product X	317500	635000	762000
Unit Price	$0.60	$1.70	$1.00
Total Direct material purcjases	$190,500	$1,079,500	$762,000	$2,032,000