tires according to the following table The purchase prices o

tires according to the following table: The purchase prices of rubber and steel are $2.9 and $3.8 per pound, respectively. The desired ending inventories of rubber and steel belts are 55,000 and 12,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 65,000 and 10,000 pounds, respectively Passenger tires Truck tires

Solution

Material purchase budget :

	Rubber	Steel belts	Total
Pounds required for production:
Passenger tires	1534000	295000
Trucks	1098000	234000
Desired ending inventory	55000	12000
Total	2687000	541000
Beginning inventory	(65000)	(10000)
Total units purchased	2622000	531000
Unit price	2.9	3.8
Total material to be purchased	7603800	2017800	9621600