2. Prepare a direct materials purchases budget for chemicals for the months of January and February. Do not include a multiplication symbol as part of your answer. Patrick Inc. Direct Materials Purchases Budget - Chemicals in Gallons For the Months of January and February January February Production in units 43,800 41,000 Gallons per unit 5.5 5.5 Gallons for production 240,900 225,500 Desired ending inventory 33,825 41,456 Needed 274,725 266,956 Less: Beginning inventory 36,135 33,825 Purchases 238,590 233,131 Price per gallon $ 2.00 $ 2.00 Dollar purchases $ 477,180 $ 466,264

Purchases Budget for January   238,590   units  

Purchases Budget for February   233,131 units

Dollar Purchases Budget for January    $ 477,180

Dollar Purchases Budget for February    $ 466,264

Explanation:

Patrick Inc.

Direct Materials Purchases Budget -

                                            January           February

Production in units             43,800              41,000

Gallons per unit                  5.5                         5.5

Gallons for production    240,900             225,500

Desired ending inventory 33,825                 41,456

Needed                            274,725              266,956

Less: Beginning inventory 36,135                 33,825

Purchases                         238,590               233,131

Price per gallon                   $ 2.00                  $ 2.00

Dollar purchases               $ 477,180            $ 466,264

Direct Materials Purchases budget is calculated by calculating the gallons per unit which is added to desired ending inventory and beginning inventory is deducted. The purchases units are multiplied with price per unit.

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