Preparing a Direct Materials Purchases Budget

Patrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the first 3 months of the coming year is:

January	40,000
February	55,000
March	60,000

Each drum requires 6 gallons of chemicals and one plastic drum container. Company policy requires that ending inventories of raw materials for each month be 20% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one drum is $1.60.

Required:

1. Calculate the ending inventory of chemicals in gallons for December of the prior year, and for January and February. What is the beginning inventory of chemicals for January? Round your answers to the nearest whole gallon.

Ending inventory for December	fill in the blank 03436801d02f055_1 gallons
Ending inventory for January	fill in the blank 03436801d02f055_2 gallons
Ending inventory for February	fill in the blank 03436801d02f055_3 gallons
Beginning inventory for January	fill in the blank 03436801d02f055_4 gallons

2. Prepare a direct materials purchases budget for chemicals for the months of January and February. Round Dollar purchases to the nearest dollar. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your answer.

Patrick Inc.
Direct Materials Purchases Budget - Chemicals in Gallons
For the Months of January and February
	January	February
Production in units	fill in the blank 50f1f0f36ffd07a_1	fill in the blank 50f1f0f36ffd07a_2
Gallons per unit	fill in the blank 50f1f0f36ffd07a_3	fill in the blank 50f1f0f36ffd07a_4
Gallons for production	fill in the blank 50f1f0f36ffd07a_5	fill in the blank 50f1f0f36ffd07a_6
Desired ending inventory	fill in the blank 50f1f0f36ffd07a_7	fill in the blank 50f1f0f36ffd07a_8
Needed	fill in the blank 50f1f0f36ffd07a_9	fill in the blank 50f1f0f36ffd07a_10
Less: Beginning inventory	fill in the blank 50f1f0f36ffd07a_11	fill in the blank 50f1f0f36ffd07a_12
Purchases	fill in the blank 50f1f0f36ffd07a_13	fill in the blank 50f1f0f36ffd07a_14
Price per gallon	$fill in the blank 50f1f0f36ffd07a_15	$fill in the blank 50f1f0f36ffd07a_16
Dollar purchases	$fill in the blank 50f1f0f36ffd07a_17	$fill in the blank 50f1f0f36ffd07a_18

3. Calculate the ending inventory of drums for December of the prior year, and for January and February. Round your answers to the nearest whole unit.

Ending inventory for December	fill in the blank 8d1ce1f5cf9107d_1 units
Ending inventory for January	fill in the blank 8d1ce1f5cf9107d_2 units
Ending inventory for February	fill in the blank 8d1ce1f5cf9107d_3 units

4. Prepare a direct materials purchases budget for drums for the months of January and February. Round Dollar purchases to the nearest dollar. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your answer.

Patrick Inc.
Direct Materials Purchases Budget - Drums
For the Months of January and February
	January	February
Production in units	fill in the blank 36f77df69fddffa_1	fill in the blank 36f77df69fddffa_2
Drums per unit	fill in the blank 36f77df69fddffa_3	fill in the blank 36f77df69fddffa_4
Drums for production	fill in the blank 36f77df69fddffa_5	fill in the blank 36f77df69fddffa_6
Desired ending inventory	fill in the blank 36f77df69fddffa_7	fill in the blank 36f77df69fddffa_8
Needed	fill in the blank 36f77df69fddffa_9	fill in the blank 36f77df69fddffa_10
Less: Beginning inventory	fill in the blank 36f77df69fddffa_11	fill in the blank 36f77df69fddffa_12
Purchases	fill in the blank 36f77df69fddffa_13	fill in the blank 36f77df69fddffa_14
Price per drum	$fill in the blank 36f77df69fddffa_15	$fill in the blank 36f77df69fddffa_16
Dollar purchases	$fill in the blank 36f77df69fddffa_17	$fill in the blank 36f77df69fddffa_18