Question: Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of

Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of the coming year is: Month Units January 42,600 February 39,800 March 48,000 Each drum requires 5.5 gallons of chemicals and one plastic drum. 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 $1.90. The cost of one drum is $1.50.

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Preparing a Direct Materials Purchases Budget

Patrick Inc. makes industrial solvents sold in 5-gallon drums. Planned production in units for the first 3 months of the coming year is:

DATA
January	42,600
February	39,800
March	48,000

Direct materials needed per unit:
Chemicals (in gallons)	5.5
Plastic drums	1

Direct materials cost:
Chemicals (per gallon)	$1.90
Plastic drums (per unit)	$1.50

Ending inventory requirements	20%	of next month's production needs of raw materials

That ending inventory policy was met for the ending inventory of December in the prior year.

Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold

in 5-gallon drums. Planned production in units for the first 3 months

of the coming year is: Month Units January 42,600 February 39,800 March

the nearest whole gallon. your answer. Patrick Inc. Patrick Inc. Direct Materials Purchases Budget - Chemicals in Gallons For the Months of January and February 4. Prepare a direct materials purchases budget for drums for the months of January and February. Do not round intermediate calculations. Round dollar purchases to the nearest dollar. Round price per drum to the nearest cent. Round all the other values to the nearest whole unit. Do not include a multiplication symbol as part of your

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