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 45,000 February 50,000 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 54,000 gallons Ending inventory for January 60,000 gallons Ending inventory for February 72,000 gallons Beginning inventory for January 54,000 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 45,000 50,000 Gallons per unit 6 6 Gallons for production 270,000 330,000 x Desired ending inventory 66,000 x Needed 306,000 X Less: Beginning inventory Purchases Price per gallon Dollar purchases 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 units Ending inventory for January units Ending inventory for February 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 Drums per unit Drums for production Desired ending inventory Needed Less: Beginning inventory Purchases Price per drum Dollar purchases