Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 77

Question

Direct Materials Purchases Budget

Pasadena Candle Inc. budgeted production of 770,000 candles for the year. Wax is required to produce a candle. Assume 12 ounces of wax is required for each candle. The estimated January 1 wax inventory is 16,300 pounds. The desired December 31 wax inventory is 12,500 pounds. If candle wax costs $1.70 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: Candles Desired ending inventory, December 31 Total units available Estimated beginning inventory, January 1 Total pounds to be purchased Unit price $ Total direct materials to be purchased $

Explanation / Answer

solution;

Pasadena Candle Inc. Direct Materials Purchases Budget For the Year Ending December 31 Pounds of wax required for production: Candles (770000*12/16) 577,500 add :Desired ending inventory, December 31       12,500 Total units available 590,000 Less :Estimated beginning inventory, January 1       16,300 Total pounds to be purchased 573,700 x Unit price         1.70 Total direct materials to be purchased 975,290

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