Anticipated sales for Safety Grip Company were 40,000 passenger car tires and 12

Question

Anticipated sales for Safety Grip Company were 40,000 passenger car tires and 12,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:

The purchase prices of rubber and steel are $3.3 and $4.3 per pound, respectively. The desired ending inventories of rubber and steel belts are 38,000 and 8,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 44,000 and 6,000 pounds, respectively.

Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9.

2) Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows:

Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:

The direct labor rate for each department is as follows:

Prepare the direct labor cost budget for July 20Y9.

3) Sweet Tooth Candy Company budgeted the following costs for anticipated production for August:

Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

Passenger Car Truck Rubber 25 lbs. per unit 58 lbs. per unit Steel belts 4 lbs. per unit 10 lbs. per unit

Explanation / Answer

Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9

Rubber Steel Belts Total Pounds required for production: Passenger tires 1000000 160000 Truck tires 696000 120000 Desired ending inventory 38000 8000 Total needs 1734000 288000 Less: beginning inventory (44000) (6000) Total units purchased 1690000 282000 Unit price 3.3 4.3 Total direct materials to be purchased 5577000 1212600 6789600

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