Problem
Direct Materials Purchases Budget
Anticipated sales for Sure Grip Tire Company were 67,000 passenger car tires and 20,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table:
|
|
Passenger Car
|
Truck
|
|
Rubber
|
31 lbs. per unit
|
72 lbs. per unit
|
|
Steel belts
|
6 lbs. per unit
|
15 lbs. per unit
|
The purchase prices of rubber and steel are $2.8 and $3.7 per pound, respectively. The desired ending inventories of rubber and steel belts are 63,000 and 13,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 74,000 and 11,000 pounds, respectively.
Prepare a direct materials purchases budget for Sure Grip Tire Company for the year ended December 31, 2016. When required, enter unit prices to the nearest cent.