Direct Materials Purchases Budget Pasadena Candle Inc budget

Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 750,000 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 16,100 pounds. The desired December 31 wax inventory is 14,500 pounds. If candle wax costs $1.40 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 Previous Next All work saved. Emait Instructor Submit Test for Grading

Solution

Purchase Budget Pounds wax required for production: Production requirement 515625 (750000 units @11 ounces / 16) pounds Add: Desired Ending inventory 14500 Total units available 530125 Less: Desired Beginning Inventory 16100 Purchase of wax in pounds 514025 Unit price per pound 1.4 Total direct material to be purchased 719635