Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 780,000 candles for the January. Wax is required to produce a candle. Assume 15 ounces of wax is required for each candle. The estimated January 1 wax inventory is 16,000 pounds. The desired January 31 wax inventory is 14,300 pounds. If candle wax costs $1.60 per pound, determine the direct materials purchases budget for January. (One pound = 16 ounces.) Round all computed answers to the nearest whole number. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Pasadena Candle Inc.Direct Materials Purchases BudgetFor the Month Ending January 31 Pounds of wax required for production: Candles Desired ending inventory, January 31 Total units available fill in the blank 5
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Direct Materials Purchases Budget
Pasadena Candle Inc. budgeted production of 780,000 candles for the January. Wax is required to produce a candle. Assume 15 ounces of wax is required for each candle. The estimated January 1 wax inventory is 16,000 pounds. The desired January 31 wax inventory is 14,300 pounds. If candle wax costs $1.60 per pound, determine the direct materials purchases budget for January. (One pound = 16 ounces.) Round all computed answers to the nearest whole number. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Pasadena Candle Inc.Direct Materials Purchases BudgetFor the Month Ending January 31
| Pounds of wax required for production: | |
|
|
Candles |
|
|
Desired ending inventory, January 31 |
| Total units available | fill in the blank 5 |
|
|
Estimated beginning inventory, January 1 |
| Total pounds to be purchased | fill in the blank 8 |
| Unit price | $fill in the blank 9 |
| Total direct materials to be purchased in January | $fill in the blank 10 |
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