Question

eparing a Direct Materials Purchases Budget Patrick Inc. makesindustrial solvents sold in five-gallon drums. Planned productionin units for the first three months of the coming year is: January45,000 February 55,000 March 65,000 Each drum requires 6 gallons ofchemicals and one plastic drum. Company policy requires that endinginventories of raw materials for each month be 20% of the nextmonth's production needs. That policy was met for the endinginventory of December in the prior year. The cost of one gallon ofchemicals is $2.00. The cost of one drum is $1.60. Required: 1.Calculate the ending inventory of chemicals in gallons for Decemberof the prior year, and for January and February. What is thebeginning inventory of chemicals for January? Round your answers tothe nearest whole gallon. Ending inventory for December gallonsEnding inventory for January gallons Ending inventory for Februarygallons Beginning inventory for January gallons 2. Prepare a directmaterials purchases budget for chemicals for the months of Januaryand February. Round Dollar purchases to the nearest dollar. Roundall the other values to the nearest whole unit. Do not include amultiplication symbol as part of your answer. Patrick Inc. DirectMaterials Purchases Budget – Chemicals in Gallons For the Months ofJanuary and February January February Production in units Gallonsper unit Gallons for production Desired ending inventory NeededLess: Beginning inventory Purchases Price per gallon $ $ Dollarpurchases $ $ 3. Calculate the ending inventory of drums forDecember of the prior year, and for January and February. Roundyour answers to the nearest whole unit.