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Purple Inc. production budget for Product X for the year ended December 31 is as follows: Product X Sales 640,000 units Plus desired ending inventory
Purple Inc. production budget for Product X for the year ended December 31 is as follows:
Product X | ||
Sales | 640,000 | units |
Plus desired ending inventory | 85,000 | |
Total | 725,000 | |
Less estimated beginning inventory, Jan. 1 | 90,000 | |
Total production | 635,000 | |
In Purple's production operations, Materials A, B, and C are required to make Product X. The quantities of direct materials expected to be used for each unit of product are as follows:
Product X | |
Material A | .50 pound per unit |
Material B | 1.00 pound per unit |
Material C | 1.20 pound per unit |
The prices of direct materials are as follows: | |
Material A | $0.60 per pound |
Material B | 1.70 per pound |
Material C | 1.00 per pound |
Prepare a direct materials purchases budget for Product X, assuming that there are no beginning or ending inventories for direct materials (all units purchased are used in production).
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