Anticipated sales for Safety Grip Company were 42,000 passenger car tires and 19

Question

Anticipated sales for Safety Grip Company were 42,000 passenger car tires and 19,000 truck tires. Rubber and steel belts are used in producing 35 lbs. per unit 78 lbs. per unit Steel belts The purchase prices of rubber and steel are $1.20 and $0.80 per pound, respectively. The desired ending inventories of rubber and steel belts are 40,000 and 10,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 46,000 and 8,000 pounds, respectively. Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9. 5 lbs. per unit 8 Ibs. per unit Safety Grip Company Direct Materials Purchases Budget r 31, 20Y Total

Explanation / Answer

Direct material purchase budget :

Rubber Steel belts Total Pounds required in production Passenger tires 1470000 210000 Trucks 1482000 152000 Add: Desired ending inventory 40000 10000 Total 2992000 372000 Less: Beginning inventory -46000 -8000 Total units purchased 2946000 364000 Unit price 1.20 0.80 Cost of material purchased 3535200 291200 3826400

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