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:

Smart Strike Company Direct Materials Purchases Budget - Polyvinyl Chloride Panels For January and February

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:

Smart Strike Company Direct Materials Purchases Budget - Bladder and Valve For January and February

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:

Smart Strike Company Direct Materials Purchases Budget - Glue For January and February

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