Acct380 Cornerstone of Cost Management: E8-3 FlashKick Company (Direct Materials Purchases Budget)

Acct380 Cornerstone of Cost Management: E8-3 FlashKick Company (Direct Materials Purchases Budget)

Acct380 Cornerstone of Cost Management
Cornerstone Exercise 8.3 Direct Materials Purchases Budget
Refer to Cornerstone Exercise 8.2 for the production budgets for practice balls and match balls.
Every practice ball requires 0.7 square yard of polyvinyl chloride panels, one bladder with valve (to fill with air), and 3 ounces of glue. FlashKick’s policy is that 20 percent of the following month’s production needs for raw materials be in ending inventory. Beginning inventory in January for all raw materials met this requirement.

1. Construct a direct materials purchases budget for each type of raw materials for the practice ball line for January and February of the coming year. If required, round your answers to the nearest cent.
2. What if -- FlashKick decreased the ending inventory percentage to 15 percent of the next month's production needs? What impact would that have on the direct materials purchases budget prepared in Requirement 1?
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