Desired ending inventories of rubber and steel
Business Management
Anticipated sales for Safety Grip Company were 42,000 passenger car tires and 19,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows:
Passenger Car Truck
Rubber 35 Ibs. Per Unit 75 Ibs. Per Unit
Steel Belts 5 Ibs. Per Unit 8 Ibs. Per Unit
The purchase prices of rubber and steel are $1.20 and $0.80 per pound, respectively. The desired ending inventories of rubber and steel belts are 40,000 and 10,000 pounds, respectively.
The estimated beginning inventories for rubber and steel belts are 46,000 and 8,000 pounds, respectively. Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 2016.
