Purple Co.'s production budget for Product X for the year ending December 31 is as follows: Product X Expected units to be sold 640,000 Desired ending inventory, December 31 85,000 Total units available 725,000 Estimated beginning inventory, January 1 (90,000) Total units to be produced 635,000 In Purple's production operations, Materials A, B, and C are required to make Product X. The quantities of direct materials expected to be used for each unit of product are as follows: Product X Material A 0.50 lb. per unit Material B 1.00 lb. per unit Material C 1.20 lbs. per unit The prices of direct materials are as follows: Material A $0.60 per pound Material B $1.70 per pound Material C $1.00 per pound Prepare a direct materials purchases budget for Product X, assuming that there are no beginning or ending inventories for direct materials (all units purchased are used in production). Round unit price to two decimal places and the remaining answers to the nearest whole dollar. Purple Co. Direct Materials Purchases Budget For the Year Ending December 31 Direct Materials A B C Total Units required for production of Product X fill in the blank 1 lbs. fill in the blank 2 lbs. fill in the blank 3 lbs. Unit price $fill in the blank 4

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 20E: Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc.,...

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Purple Co.'s production budget for Product X for the year ending December 31 is as follows:

		Product X
Expected units to be sold		640,000
Desired ending inventory, December 31		85,000
Total units available		725,000
Estimated beginning inventory, January 1		(90,000)
Total units to be produced		635,000

In Purple's production operations, Materials A, B, and C are required to make Product X. The quantities of direct materials expected to be used for each unit of product are as follows:

Product X

Material A 0.50 lb. per unit

Material B 1.00 lb. per unit

Material C 1.20 lbs. per unit

The prices of direct materials are as follows:

Material A $0.60 per pound

Material B $1.70 per pound

Material C $1.00 per pound

Prepare a direct materials purchases budget for Product X, assuming that there are no beginning or ending inventories for direct materials (all units purchased are used in production). Round unit price to two decimal places and the remaining answers to the nearest whole dollar.

Purple Co. Direct Materials Purchases Budget For the Year Ending December 31
	Direct Materials
	A	B	C	Total
Units required for production of Product X	fill in the blank 1 lbs.	fill in the blank 2 lbs.	fill in the blank 3 lbs.
Unit price	$fill in the blank 4	$fill in the blank 5	$fill in the blank 6
Total direct materials purchases	$fill in the blank 7	$fill in the blank 8	$fill in the blank 9	$fill in the blank 10

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