Question - Purple Inc. production budget for Product X for the year ended December 31 is as follows:
Product X
Sales 640,000 units
Plus desired ending inventory 85,000
Total 725,000
Less estimated beginning inventory, Jan. 1 90,000
Total production 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 .50 pound per unit
Material B 1.00 pound per unit
Material C 1.20 pound per unit
The prices of direct materials are as follows:
Material A Dh 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).