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 40,000 February 55,000 March 65,000 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 fill in the blank 101decfc4038fb5_1 gallons Ending inventory for January fill in the blank 101decfc4038fb5_2 gallons Ending inventory for February fill in the blank 101decfc4038fb5_3 gallons Beginning inventory for January fill in the blank 101decfc4038fb5_4 gallons 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 January February Production in units fill in the blank 3d90c2faffbb050_1 fill in the blank 3d90c2faffbb050_2 Gallons per unit fill in the blank 3d90c2faffbb050_3 fill in the blank 3d90c2faffbb050_4 Gallons for production fill in the blank 3d90c2faffbb050_5 fill in the blank 3d90c2faffbb050_6 Desired ending inventory fill in the blank 3d90c2faffbb050_7 fill in the blank 3d90c2faffbb050_8 Needed fill in the blank 3d90c2faffbb050_9 fill in the blank 3d90c2faffbb050_10 Less: Beginning inventory fill in the blank 3d90c2faffbb050_11 fill in the blank 3d90c2faffbb050_12 Purchases fill in the blank 3d90c2faffbb050_13 fill in the blank 3d90c2faffbb050_14 Price per gallon $fill in the blank 3d90c2faffbb050_15 $fill in the blank 3d90c2faffbb050_16 Dollar purchases $fill in the blank 3d90c2faffbb050_17 $fill in the blank 3d90c2faffbb050_18 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 fill in the blank 007c5d010049fa2_1 units Ending inventory for January fill in the blank 007c5d010049fa2_2 units Ending inventory for February fill in the blank 007c5d010049fa2_3 units

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 40,000 February 55,000 March 65,000 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 fill in the blank 101decfc4038fb5_1 gallons Ending inventory for January fill in the blank 101decfc4038fb5_2 gallons Ending inventory for February fill in the blank 101decfc4038fb5_3 gallons Beginning inventory for January fill in the blank 101decfc4038fb5_4 gallons 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 January February Production in units fill in the blank 3d90c2faffbb050_1 fill in the blank 3d90c2faffbb050_2 Gallons per unit fill in the blank 3d90c2faffbb050_3 fill in the blank 3d90c2faffbb050_4 Gallons for production fill in the blank 3d90c2faffbb050_5 fill in the blank 3d90c2faffbb050_6 Desired ending inventory fill in the blank 3d90c2faffbb050_7 fill in the blank 3d90c2faffbb050_8 Needed fill in the blank 3d90c2faffbb050_9 fill in the blank 3d90c2faffbb050_10 Less: Beginning inventory fill in the blank 3d90c2faffbb050_11 fill in the blank 3d90c2faffbb050_12 Purchases fill in the blank 3d90c2faffbb050_13 fill in the blank 3d90c2faffbb050_14 Price per gallon $fill in the blank 3d90c2faffbb050_15 $fill in the blank 3d90c2faffbb050_16 Dollar purchases $fill in the blank 3d90c2faffbb050_17 $fill in the blank 3d90c2faffbb050_18 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 fill in the blank 007c5d010049fa2_1 units Ending inventory for January fill in the blank 007c5d010049fa2_2 units Ending inventory for February fill in the blank 007c5d010049fa2_3 units

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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	40,000
February	55,000
March	65,000

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	fill in the blank 101decfc4038fb5_1 gallons
Ending inventory for January	fill in the blank 101decfc4038fb5_2 gallons
Ending inventory for February	fill in the blank 101decfc4038fb5_3 gallons
Beginning inventory for January	fill in the blank 101decfc4038fb5_4 gallons

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
	January	February
Production in units	fill in the blank 3d90c2faffbb050_1	fill in the blank 3d90c2faffbb050_2
Gallons per unit	fill in the blank 3d90c2faffbb050_3	fill in the blank 3d90c2faffbb050_4
Gallons for production	fill in the blank 3d90c2faffbb050_5	fill in the blank 3d90c2faffbb050_6
Desired ending inventory	fill in the blank 3d90c2faffbb050_7	fill in the blank 3d90c2faffbb050_8
Needed	fill in the blank 3d90c2faffbb050_9	fill in the blank 3d90c2faffbb050_10
Less: Beginning inventory	fill in the blank 3d90c2faffbb050_11	fill in the blank 3d90c2faffbb050_12
Purchases	fill in the blank 3d90c2faffbb050_13	fill in the blank 3d90c2faffbb050_14
Price per gallon	$fill in the blank 3d90c2faffbb050_15	$fill in the blank 3d90c2faffbb050_16
Dollar purchases	$fill in the blank 3d90c2faffbb050_17	$fill in the blank 3d90c2faffbb050_18

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	fill in the blank 007c5d010049fa2_1 units
Ending inventory for January	fill in the blank 007c5d010049fa2_2 units
Ending inventory for February	fill in the blank 007c5d010049fa2_3 units

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
	January	February
Production in units	fill in the blank 3a9517fc7034fd1_1	fill in the blank 3a9517fc7034fd1_2
Drums per unit	fill in the blank 3a9517fc7034fd1_3	fill in the blank 3a9517fc7034fd1_4
Drums for production	fill in the blank 3a9517fc7034fd1_5	fill in the blank 3a9517fc7034fd1_6
Desired ending inventory	fill in the blank 3a9517fc7034fd1_7	fill in the blank 3a9517fc7034fd1_8
Needed	fill in the blank 3a9517fc7034fd1_9	fill in the blank 3a9517fc7034fd1_10
Less: Beginning inventory	fill in the blank 3a9517fc7034fd1_11	fill in the blank 3a9517fc7034fd1_12
Purchases	fill in the blank 3a9517fc7034fd1_13	fill in the blank 3a9517fc7034fd1_14
Price per drum	$fill in the blank 3a9517fc7034fd1_15	$fill in the blank 3a9517fc7034fd1_16
Dollar purchases	$fill in the blank 3a9517fc7034fd1_17	$fill in the blank 3a9517fc7034fd1_18

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