Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 72

Question

Direct Materials Purchases Budget

Pasadena Candle Inc. budgeted production of 725,000 candles for the year. Wax is required to produce a candle. Assume 11 ounces of wax is required for each candle. The estimated January 1 wax inventory is 18,400 pounds. The desired December 31 wax inventory is 13,800 pounds. If candle wax costs $2.00 per pound, determine the direct materials purchases budget for the year. (One pound = 16 ounces.) Round all computed answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Pasadena Candle Inc. Direct Materials Purchases Budget For the Year Ending December 31 Pounds of wax required for production: Total units available Total pounds to be purchased Unit price $ Total direct materials to be purchased $

Explanation / Answer

Prepare direct materials purchases budget

Pasadena Candle Inc. Direct Materials Purchases Budget For the Year Ending December 31 Pounds of wax required for production (725000*11/16) 498438 Desired ending inventory 13800 Total units available 512238 Beginning inventory (18400) Total pounds to be purchased 493838 Unit price 2 Total direct materials to be purchased 987676

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