Use the following information for questions #8 and #9. Budgeted sales for Sure G
ID: 2588466 • Letter: U
Question
Use the following information for questions #8 and #9. Budgeted sales for Sure Grip Tire Company were 51,000 passenger car tires and 16,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table: Passenger Car Truck Rubber 26 pounds per unit 66 pounds per unit Steel belts 7 pounds per unit 12 pounds per unit The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The estimated beginning inventories on January 1 for rubber and steel belts are 56,000 and 9,000 pounds, respectively. The desired ending inventories on December 31 of rubber and steel belts are 48,000 and 11,000 pounds, respectively. 8. How much is the sale of all of the passenger car tires expected to cost this year? 9. What is the expected expenditure for steel belts this year? Use the following information for questions #8 and #9. Budgeted sales for Sure Grip Tire Company were 51,000 passenger car tires and 16,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires according to the following table: Passenger Car Truck Rubber 26 pounds per unit 66 pounds per unit Steel belts 7 pounds per unit 12 pounds per unit The purchase prices of rubber and steel are $3.30 and $4.30 per pound, respectively. The estimated beginning inventories on January 1 for rubber and steel belts are 56,000 and 9,000 pounds, respectively. The desired ending inventories on December 31 of rubber and steel belts are 48,000 and 11,000 pounds, respectively. 8. How much is the sale of all of the passenger car tires expected to cost this year? 9. What is the expected expenditure for steel belts this year?Explanation / Answer
8) Sale of all passenger car tires expected to cost this year:
51000 X 26 X 3.3 + 51000 X 7 X 4.3 = 5,910,900
9) Expected expenditure for steel belts this year:
Number of units manufactured = Sales + closing stock - opening stock
16000 +11000 -9000 = 18000
EXpenditure = 18000 X 66 X 3.3 + 18000 X 12 X 4.3 = 4,849,200