Texas Rex sells t-shirts. Expected sales for each quarter is 1000, 1200, 1500, and 2000 t-shirts at $10.00 each. They anticipate no price change.

The Direct Materials Budget tells management how much must be bought to support production and the cost of those purchases.

Plain t-shirts cost $3.00 each, and ink (for the screen printing) cost $0.20 per ounce. The factory needs one plain t-shirt and five ounces of ink for each logoed t-shirt that it produces. Texas Rexs policy is to have 10% of the following quarters needs in ending inventory. The factory has 58 plain t-shirts and 390 ounces of ink on hand on January 1. At the end of the year, the desired ending inventory is 106 plain t-shirts and 530 ounces of ink.

Texas Rex, Inc.

Direct Materials Budget

For the year ending December 31, 2018

Plain t-shirts: Q1 Q2 Q3 Q4 Total

Units to be Produced

Direct Materials per unit_______ _______ ________ _______ ________

Production Needs

Desired Ending Inv. _______ _______ ________ _______ ________

Total Needs

Less Beginning Inv. _______ _______ ________ _______ ________

Direct Materials

To be Purchased

Cost per t-shirt _______ _______ ________ _______ ________

Total T-shirt Purchase

Cost

Ink: Q1 Q2 Q3 Q4 Total

Units to be Produced

Direct Materials per unit_______ _______ ________ _______ ________

Production Needs

Desired Ending Inv. _______ _______ ________ _______ ________

Total Needs

Less Beginning Inv. _______ _______ ________ _______ ________

Direct Materials

To be Purchased

Cost per ounce _______ _______ ________ _______ ________

Total Ink Purchase Cost

Total Cost of

All Direct Materials