Pasadena candle inc. budgeted production of 785,000 candles for january. wax is required to produce a candle. assume 10 ounces of wax is required for each candle. the estimated january 1 wax inventory is 16,000 pounds. the desired january 31 wax inventory is 12,500 pounds. if candle wax costs $1.24 per pound, determine the direct materials purchases budget for january. (one pound = 16 ounces.) for those boxes in which you must enter subtracted or negative numbers use a minus sign.

$604,035

Explanation:

Assume One Pound = 16 Ounces

Total Wax Required:

= Production of Finished Goods × Pounds of wax required for production

= 490,625 Pounds

Total Units Available = Total Wax Required +  Ending Inventory, Jan.31

                                   = 490,625 Pounds + 12,500 pounds

                                   = 503,125 Pounds

Total Pounds to be Purchased:

= Total Units Available - Beginning Inventory, Jan. 1

= 503,125 Pounds - 16,000 pounds

= 487,125 pounds

Total Direct Materials Purchased:

= Total Pounds to be Purchased × Unit price

= 487,125 pounds × $1.24 per pound

= $604,035