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 February March 45,000 50,000 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 Ending Inventory for January Ending Inventory for February Beginning Inventory for January 72,000 X gallons gallons gallons gallons Feedback Check My Work Incorrect 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 Line Item Description January February Production in units Gallons per unit Gallons for production Desired ending Inventory Needed Less: Beginning inventory Purchases Price per gallon Dollar purchases Feedback Check My Work Incorrect 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 Ending Inventory for January Ending Inventory for February units Feedback Check My Work 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. 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 Line Item Description Production in units Drums per unit Drums for production Desired ending Inventory Needed Less: Beginning inventory Purchases Price per drum Dollar purchases Feedback January February