Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the first 3 months of the coming year is: January 45,000 February 50,000 March 65,000 Each drum requires 6 gallons of chemicals and one plastic drum container. Company policy requires that ending inventories of raw materials for each month be 20% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one drum is $1.60. Required: 1. Calculate the ending inventory of chemicals in gallons for December of the prior year, and for January and February. What is the beginning inventory of chemicals for January? Round your answers to the nearest whole gallon. Ending inventory for December gallons Ending inventory for January gallons Ending inventory for February gallons Beginning inventory for January gallons
Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in 5-gallon drum containers. Planned production in units for the first 3 months of the coming year is: January 45,000 February 50,000 March 65,000 Each drum requires 6 gallons of chemicals and one plastic drum container. Company policy requires that ending inventories of raw materials for each month be 20% of the next month's production needs. That policy was met for the ending inventory of December in the prior year. The cost of one gallon of chemicals is $2.00. The cost of one drum is $1.60. Required: 1. Calculate the ending inventory of chemicals in gallons for December of the prior year, and for January and February. What is the beginning inventory of chemicals for January? Round your answers to the nearest whole gallon. Ending inventory for December gallons Ending inventory for January gallons Ending inventory for February gallons Beginning inventory for January gallons
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 23BEA: Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in...
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