| Orlane teaching and learning resource bom Cengage Learning·Internet Explorer D

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| Orlane teaching and learning resource bom Cengage Learning·Internet Explorer Direct Materials Purchases Budget Anticipatod sales for Sure Grip Tire Company were 71,000 passenger car tires and 21,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table: Passenger Car Truck Rubber26 bs. per unit 61 lbs. per uni Steel belts 5lbs per unit 13s. per unit rubber and steel belts are The purchase prices of rubber and steel are $2.8 and $3.7 per pound, respectively. The desired 67,000 and 14,000 pounds, respectively. The estimated beginning inventories for ending inventories of The estimated beginning Inventorkes for rubber and steel belts are 78,000 and 11,000 pounds, respectively. for Sure Grip Tire Company for the year ended December 31, 2016. When required, enter unit prices to Prenesestaect mat-purchases Prepare a direct materials purchases budget for Sure Grip Tire Company for the year ended December 31, 2016. When the nearest cent. Sure Grip Tire Company Direct Materials Purchases Budget For the Year Ending December 31, 2016 Rubbor Steel Delts Total Pounds required for production Passenger tires

Explanation / Answer

Sure Grip Tire Company

Direct Materials Purchse Budget

For the Years Ending December 31,2016

1) Pounds required for production :

Passenger tires

Truck tires

1,846,000 lbs

1,281,000 lbs

3,127,000 lbs

355,000 lbs

273,00 lbs

628,000 lbs

Explanation Rubber Steel Belts Total

1) Pounds required for production :

Passenger tires

Truck tires

1,846,000 lbs

1,281,000 lbs

3,127,000 lbs

355,000 lbs

273,00 lbs

628,000 lbs

2) Desired Ending Inventory 67,000 lbs 14,000 lbs 3) Estimaged Beginning Inventory 78,000 lbs 11,000 lbs 4) Total units purchased ( 1 + 2 - 3) 3,116,000 lbs 631,000 lbs 5) Unit price $ 2.80 $3.70 6) Total Direct Material to be purchased ( 4 x 5) $ 8,724,800 $ 2,334,700 $11,059,500

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