The Ruff Jeans Company produces two different types of jeans, Simple Life, and F

Question

The Ruff Jeans Company produces two different types of jeans, Simple Life, and Fancy Life. The company sales budget estimates that 350,000 of the Simple Life jeans and 200,000 of the Fancy Life jeans will be sold during the current year. The production budget requires 353,500 units of Simple Life and 196,000 Fancy Life be manufactured. The Simple Life jeans require 3 yards of denim material, a zipper, and 25 yards of thread. The Fancy Life jeans require 4.5 yards of denim material, a zipper, and 40 yards of thread. Each yard of denim material costs $3.25, the zipper costs $0.75 each, and the thread is $0.02 per yard. There is enough material to make 2,000 jeans of each type at the beginning of the year. The desired amount of materials left in ending inventory is to have enough to manufacture 3,500 jeans of each type.

Prepare a direct materials purchases budget. Round final answer to whole dollar.

Ruff Jeans Company Direct Materials Purchases Budget For the Year Ending December 31 Denim Zippers Thread Total Materials required for production: Simple Fancy Desired ending inventory: Simple Fancy Total Less beginning inventory: Simple Fancy Total direct materials to be purchased Unit price $ $ $ Total direct materials to be purchased $ $ $ $

Explanation / Answer

Ruff Jeans Company Direct Materials Purchases Budget For the Year Ending December 31 Denim Zippers Thread Total Materials required for production: Simple       10,60,500        3,53,500       88,37,500    1,02,51,500 Fancy        8,82,000        1,96,000       78,40,000       89,18,000 Desired ending inventory: Simple           10,500             3,500           87,500        1,01,500 Fancy           15,750             3,500        1,40,000        1,59,250 Total       19,68,750        5,56,500    1,69,05,000    1,94,30,250 Less beginning inventory: Simple             6,000             2,000           50,000           58,000 Fancy             9,000             2,000           80,000           91,000 Total direct materials to be purchased       19,53,750        5,52,500    1,67,75,000    1,92,81,250 Unit price               3.25               0.75               0.02 Total direct materials to be purchased       63,49,688        4,14,375        3,35,500       70,99,563

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