Refer to Cornerstone Exercise 8-2 for the production budgets for practice balls and match balls. Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. StrikeSmart’s policy is that 10 percent of the following month’s production needs for raw materials be ending inventory.

Beginning inventory in January for all raw materials met this requirement.

Required:

1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year.

2. What if StrikeSmart increased the ending inventory percentage to 20 percent of the next month’s production needs? What impact would that have on the direct materials purchases budgets prepared in Requirement 1?

LO1