Question
Direct Materials Purchases Budget Smart Strike Company manufactures and sells soccer balls for teams of children in elementary and high school. Smart Strike's best-selling lines
Direct Materials Purchases Budget
Smart Strike Company manufactures and sells soccer balls for teams of children in elementary and high school. Smart Strike's best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, Smart Strike expects to sell the following:
Practice Balls | Match Balls | ||||||
Units | Selling Price | Units | Selling Price | ||||
January | 46,000 | $8.55 | 6,600 | $16.60 | |||
February | 62,000 | $8.55 | 8,400 | $16.60 | |||
March | 85,000 | $8.55 | 13,500 | $16.60 | |||
April | 105,000 | $8.55 | 17,000 | $16.60 |
Smart Strike requires ending inventory of product to equal 20 percent of the next month's unit sales. Beginning inventory in January was 9,200 practice soccer balls and 1,320 match soccer 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. Smart Strike's policy is that 20 percent of the following month's production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement.
Required:
Question Content Area
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. If required, round your answers to the nearest cent.
HINT: Units Produced = Expected Sales + Desired Ending Inventory - Beginning Inventory.
Direct materials purchases budget for polyvinyl chloride panels:
Polyvinyl chloride panels: | January | February |
Units produced | ||
Direct materials per unit | ||
Direct materials for production | ||
Desired ending inventory | ||
Total needed | ||
Less: Beginning inventory | ||
Direct materials purchases | ||
Feedback
The direct materials purchases budget is similar in format to the production budget; it is based on the amount of materials needed for production and the inventories of direct materials. The purchases amount can be determined by considering beginning and ending (desired) inventory amounts. Also, consider expected usage.
Question Content Area
Direct materials purchases budget for bladder and valve:
Bladder and valve: | January | February |
Units produced | ||
Direct materials per unit | ||
Direct materials for production | ||
Desired ending inventory | ||
Total needed | ||
Less: Beginning inventory | ||
Direct materials purchases |
Feedback Area
Feedback
The direct materials purchases budget is similar in format to the production budget; it is based on the amount of materials needed for production and the inventories of direct materials. Purchases = Expected usage + Desired ending inventory of direct materials Beginning inventory of direct materials
Question Content Area
Direct materials purchases budget for glue:
Glue: | January | February |
Units produced | ||
Direct materials per unit | ||
Direct materials for production | ||
Desired ending inventory | ||
Total needed | ||
Less: Beginning inventory | ||
Direct materials purchases | ||
Feedback Area
Feedback
The direct materials purchases budget is similar in format to the production budget; it is based on the amount of materials needed for production and the inventories of direct materials. Purchases = Expected usage + Desired ending inventory of direct materials Beginning inventory of direct materials
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