Question

The Ruff Jeans Company produces two different types of jeans, Simple Life, and Fancy Life. The company sales budget estimates that 350,000 of the Simple Life jeans and 200,000 of the Fancy Life jeans will be sold during the current year. The production budget requires 353,500 units of Simple Life and 196,000 Fancy Life be manufactured. The Simple Life jeans require 3 yards of denim material, a zipper, and 25 yards of thread. The Fancy Life jeans require 4.5 yards of denim material, a zipper, and 40 yards of thread. Each yard of denim material costs $3.25, the zipper costs $0.75 each, and the thread is $0.02 per yard. There is enough material to make 2,000 jeans of each type at the beginning of the year. The desired amount of materials left in ending inventory is to have enough to manufacture 3,500 jeans of each type. Prepare a direct materials purchases budget. Round final answer to whole dollar.

Answer 1

Answer:

Explanation:

$\left[\begin{array}{ccc}-&Simple Jeans&Fancy Jeans\\Production&353,500&196,000\\Ending&3,500&3,500\\Beginning&2,000&2,000\\Purchase&355,000&197,500\\\end{array}\right]$

We need to purchase to fullfil the inventory for this amount of units.

Now we have to calculate each component:

$\left[\begin{array}{cccc}&denim material&zipper&thread\\Simple per unit&3&1&25\\Simple Quantity&106,5000&355,000&887,5000\\Fancy per unit&4.5&1&40\\Fancy Quantity&888,750&197,500&7,900,000\\Total Quantity&1,953,750&552,500&16,775,000\\Cost per unit&3.25&0.75&0.02\\Total Cost&6,349,687.5&414,375&335,500\\\end{array}\right]$

Next, we multply the purchase requirement per amount per tpye of unit. Once we got total quantity me multiply by the cost.