Direct Materials Purchases Budget

Anticipated sales for Sure Grip Tire Company were 60,000 passenger car tires and 18,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:

Passenger Car Truck

Rubber 25 lbs. per unit 58 lbs. per unit

Steel belts 4 lbs. per unit 10 lbs. per unit

The purchase prices of rubber and steel are $3.4 and $4.5 per pound, respectively. The desired ending inventories of rubber and steel belts are 56,000 and 12,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 66,000 and 10,000 pounds, respectively.

Prepare a direct materials purchases budget for Sure Grip Tire Company for the year ended December 31, 2016. When required, enter unit prices to the nearest cent.

Sure Grip Tire Company

Direct Materials Purchases Budget

For the Year Ending December 31, 2016

Rubber Steel Belts Total

Pounds required for production:

Passenger tires

lbs.

lbs.

Truck tires

Total

lbs.

lbs.

Total units purchased

lbs.

lbs.

Unit price x $

x $

Total direct materials to be purchased $

$

$