Direct materials purchases budget Anticipated sales for Safety Grip Company were 62,000 passenger car tires and 19,000 truck tires. Rubber and steel belts are used in producing passenger car an truck tires as follows: Passenger Car 25 lbs. per unit 6 lbs. per unit Truck Rubber 58 lbs. per unit Steel belts 15 lbs. per unit The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The desired ending inventories of rubber and steel belts are 58,000 and 13, pounds, respectively. The estimated beginning inventories for rubber and steel belts are 68,000 and 10,000 pounds, respectively. Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9.

Direct materials purchases budget Anticipated sales for Safety Grip Company were 62,000 passenger car tires and 19,000 truck tires. Rubber and steel belts are used in producing passenger car an truck tires as follows: Passenger Car 25 lbs. per unit 6 lbs. per unit Truck Rubber 58 lbs. per unit Steel belts 15 lbs. per unit The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The desired ending inventories of rubber and steel belts are 58,000 and 13, pounds, respectively. The estimated beginning inventories for rubber and steel belts are 68,000 and 10,000 pounds, respectively. Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 11E

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

Line Item Description
Pounds required for production:
Passenger tires
Truck tires
Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 20Y9
Total pounds available
Total units purchased
Unit price
Total direct materials to be purchased
X $
Rubber
1,550,000
1,102,000
2,652,000 X
lbs.
2,594,000 X lbs.
lbs.
X $
$
Steel Belts
372,000
285,000
644,000 X
lbs.
lbs.
lbs.
Total

Direct materials purchases budget
Anticipated sales for Safety Grip Company were 62,000 passenger car tires and 19,000 truck tires. Rubber and steel belts are used in producing passenger car and
truck tires as follows:
Passenger Car
25 lbs. per unit
58 lbs. per unit
6 lbs. per unit
15 lbs. per unit
The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The desired ending inventories of rubber and steel belts are 58,000 and 13,
pounds, respectively. The estimated beginning inventories for rubber and steel belts are 68,000 and 10,000 pounds, respectively.
Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9.
Rubber
Steel belts
Truck

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