The Ruff Jeans Company produces two different types of jeans, Simple Life, and F
ID: 2534404 • Letter: T
Question
The Ruff Jeans Company produces two different types of jeans, Simple Life, and Fancy Life. The company sales budget estimates that 350,000 of the Simple Life jeans and 200,000 of the Fancy Life jeans will be sold during the current year. The production budget requires 353,500 units of Simple Life and 196,000 Fancy Life be manufactured. The Simple Life jeans require 3 yards of denim material, a zipper, and 25 yards of thread. The Fancy Life jeans require 4.5 yards of denim material, a zipper, and 40 yards of thread. Each yard of denim material costs $3.25, the zipper costs $0.75 each, and the thread is $0.02 per yard. There is enough material to make 2,000 jeans of each type at the beginning of the year. The desired amount of materials left in ending inventory is to have enough to manufacture 3,500 jeans of each type.
Prepare a direct materials purchases budget. Round final answer to whole dollar.
Ruff Jeans Company Direct Materials Purchases Budget For the Year Ending December 31 Denim Zippers Thread Total Materials required for production: Simple Fancy Desired ending inventory: Simple Fancy Total Less beginning inventory: Simple Fancy Total direct materials to be purchased $ $ $ Unit price $ $ $ Total direct materials to be purchased $ $ $ $Explanation / Answer
Ruff Jeans Company
Direct Material Purchases Budget for the years ending December 31
Denim
Zippers
Thread
Total
Materials required for production
Simple
3446625
265125
176750
3888500
Fancy
2866500
147000
156800
3170300
Desired ending inventory
Simple
34125
2625
1750
38500
Fancy
51187.5
2625
2800
56612.5
Total
6398438
417375
338100
7153913
Less: beginning inventory
Simple
19500
1500
1000
22000
Fancy
29250
1500
1600
32350
Total direct materials to be purchased ($)
6349688
414375
335500
7099563
Unit price
3.25
0.75
0.02
Total direct materials to be purchased (unit)
1953750
552500
16775000
Ruff Jeans Company
Direct Material Purchases Budget for the years ending December 31
Denim
Zippers
Thread
Total
Materials required for production
Simple
3446625
265125
176750
3888500
Fancy
2866500
147000
156800
3170300
Desired ending inventory
Simple
34125
2625
1750
38500
Fancy
51187.5
2625
2800
56612.5
Total
6398438
417375
338100
7153913
Less: beginning inventory
Simple
19500
1500
1000
22000
Fancy
29250
1500
1600
32350
Total direct materials to be purchased ($)
6349688
414375
335500
7099563
Unit price
3.25
0.75
0.02
Total direct materials to be purchased (unit)
1953750
552500
16775000
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