Question - Budgeted sales for Sure Grip Tire Company were 53,000 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 27 pounds per unit 64 pounds per unit
Steel belts 5 pounds per unit 16 pounds per unit
The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The estimated beginning inventories on January 1 for rubber and steel belts are 58,000 and 9,000 pounds, respectively. The desired ending inventories on December 31 of rubber and steel belts are 50,000 and 11,000 pounds, respectively.
How much is the sale of all of the passenger car tires expected to cost this year?
What is the expected expenditure for steel belts this year?