Question
Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in five-gallon drums. Planned production in units for the first three months of
Preparing a Direct Materials Purchases Budget
Patrick Inc. makes industrial solvents sold in five-gallon drums. Planned production in units for the first three 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. 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 d7b78b01904bfc0_1 gallons |
Ending inventory for January | fill in the blank d7b78b01904bfc0_2 gallons |
Ending inventory for February | fill in the blank d7b78b01904bfc0_3 gallons |
Beginning inventory for January | fill in the blank d7b78b01904bfc0_4 gallons |
Feedback
1. See Cornerstone 9-3.
Learning Objective 2.
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 00cc6f05f00aff7_1 | fill in the blank 00cc6f05f00aff7_2 |
Gallons per unit | fill in the blank 00cc6f05f00aff7_3 | fill in the blank 00cc6f05f00aff7_4 |
Gallons for production | fill in the blank 00cc6f05f00aff7_5 | fill in the blank 00cc6f05f00aff7_6 |
Desired ending inventory | fill in the blank 00cc6f05f00aff7_7 | fill in the blank 00cc6f05f00aff7_8 |
Needed | fill in the blank 00cc6f05f00aff7_9 | fill in the blank 00cc6f05f00aff7_10 |
Less: Beginning inventory | fill in the blank 00cc6f05f00aff7_11 | fill in the blank 00cc6f05f00aff7_12 |
Purchases | fill in the blank 00cc6f05f00aff7_13 | fill in the blank 00cc6f05f00aff7_14 |
Price per gallon | $fill in the blank 00cc6f05f00aff7_15 | $fill in the blank 00cc6f05f00aff7_16 |
Dollar purchases | $fill in the blank 00cc6f05f00aff7_17 | $fill in the blank 00cc6f05f00aff7_18 |
Feedback
2. See Cornerstone 9-3.
Learning Objective 2.
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 f323bb073fdcfe4_1 units |
Ending inventory for January | fill in the blank f323bb073fdcfe4_2 units |
Ending inventory for February | fill in the blank f323bb073fdcfe4_3 units |
Feedback
3. Multiply ending inventory percentage by next month's production and then by drums used per unit, one drum. Repeat for following months. Note ending inventory is beginning inventory for next month.
Learning Objective 2.
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 91e59e009f80ff0_1 | fill in the blank 91e59e009f80ff0_2 |
Drums per unit | fill in the blank 91e59e009f80ff0_3 | fill in the blank 91e59e009f80ff0_4 |
Drums for production | fill in the blank 91e59e009f80ff0_5 | fill in the blank 91e59e009f80ff0_6 |
Desired ending inventory | fill in the blank 91e59e009f80ff0_7 | fill in the blank 91e59e009f80ff0_8 |
Needed | fill in the blank 91e59e009f80ff0_9 | fill in the blank 91e59e009f80ff0_10 |
Less: Beginning inventory | fill in the blank 91e59e009f80ff0_11 | fill in the blank 91e59e009f80ff0_12 |
Purchases | fill in the blank 91e59e009f80ff0_13 | fill in the blank 91e59e009f80ff0_14 |
Price per drum | $fill in the blank 91e59e009f80ff0_15 | $fill in the blank 91e59e009f80ff0_16 |
Dollar purchases | $fill in the blank 91e59e009f80ff0_17 | $fill in the blank 91e59e009f80ff0_18 |
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