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 | 49,000 | $8.95 | 6,400 | $16.70 | |||
| February | 64,000 | $8.95 | 8,000 | $16.70 | |||
| March | 86,000 | $8.95 | 13,500 | $16.70 | |||
| April | 115,000 | $8.95 | 17,000 | $16.70 | |||
Smart Strike requires ending inventory of product to equal 20 percent of the next month's unit sales. Beginning inventory in January was 9,800 practice soccer balls and 1,280 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:
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 | 52000 | 68400 |
| Direct materials per unit | 0.7 | 0.7 |
| Direct materials for production | 36400 | 47880 |
| Desired ending inventory | 9576 | 12852 |
| Total needed | 45976 | 60732 |
| Less: Beginning inventory | ??? | 9576 |
| Direct materials purchases | ??? | 51156 |
| Smart Strike Company | ||
| Direct Materials Purchases Budget - Bladder and Valve | ||
| For January and February | ||
| Bladder and valve: | January | February |
| Units produced | 52000 | 68400 |
| Direct materials per unit | 1 | 1 |
| Direct materials for production | 52000 | 68400 |
| Desired ending inventory | 13680 | 18360 |
| Total needed | 65680 | 86760 |
| Less: Beginning inventory | ???? | 13680 |
| Direct materials purchases | ???? | 73080 |
| Smart Strike Company | ||
| Direct Materials Purchases Budget - Glue | ||
| For January and February | ||
| Glue: | January | February |
| Units produced | 52000 | 98400 |
| Direct materials per unit | 3 | 3 |
| Direct materials for production | 156000 | 205200 |
| Desired ending inventory | 41040 | 55080 |
| Total needed | 197040 | 260280 |
| Less: Beginning inventory | ???? | 41040 |
| Direct materials purchases | ???? | 219240 |
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
15th edition
1259404781, 007802563X, 978-1259404788, 9780078025631, 978-0077522940
