Question
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
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 | 65,000 |
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 101decfc4038fb5_1 gallons |
Ending inventory for January | fill in the blank 101decfc4038fb5_2 gallons |
Ending inventory for February | fill in the blank 101decfc4038fb5_3 gallons |
Beginning inventory for January | fill in the blank 101decfc4038fb5_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 3d90c2faffbb050_1 | fill in the blank 3d90c2faffbb050_2 |
Gallons per unit | fill in the blank 3d90c2faffbb050_3 | fill in the blank 3d90c2faffbb050_4 |
Gallons for production | fill in the blank 3d90c2faffbb050_5 | fill in the blank 3d90c2faffbb050_6 |
Desired ending inventory | fill in the blank 3d90c2faffbb050_7 | fill in the blank 3d90c2faffbb050_8 |
Needed | fill in the blank 3d90c2faffbb050_9 | fill in the blank 3d90c2faffbb050_10 |
Less: Beginning inventory | fill in the blank 3d90c2faffbb050_11 | fill in the blank 3d90c2faffbb050_12 |
Purchases | fill in the blank 3d90c2faffbb050_13 | fill in the blank 3d90c2faffbb050_14 |
Price per gallon | $fill in the blank 3d90c2faffbb050_15 | $fill in the blank 3d90c2faffbb050_16 |
Dollar purchases | $fill in the blank 3d90c2faffbb050_17 | $fill in the blank 3d90c2faffbb050_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 007c5d010049fa2_1 units |
Ending inventory for January | fill in the blank 007c5d010049fa2_2 units |
Ending inventory for February | fill in the blank 007c5d010049fa2_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 3a9517fc7034fd1_1 | fill in the blank 3a9517fc7034fd1_2 |
Drums per unit | fill in the blank 3a9517fc7034fd1_3 | fill in the blank 3a9517fc7034fd1_4 |
Drums for production | fill in the blank 3a9517fc7034fd1_5 | fill in the blank 3a9517fc7034fd1_6 |
Desired ending inventory | fill in the blank 3a9517fc7034fd1_7 | fill in the blank 3a9517fc7034fd1_8 |
Needed | fill in the blank 3a9517fc7034fd1_9 | fill in the blank 3a9517fc7034fd1_10 |
Less: Beginning inventory | fill in the blank 3a9517fc7034fd1_11 | fill in the blank 3a9517fc7034fd1_12 |
Purchases | fill in the blank 3a9517fc7034fd1_13 | fill in the blank 3a9517fc7034fd1_14 |
Price per drum | $fill in the blank 3a9517fc7034fd1_15 | $fill in the blank 3a9517fc7034fd1_16 |
Dollar purchases | $fill in the blank 3a9517fc7034fd1_17 | $fill in the blank 3a9517fc7034fd1_18 |
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