Question

22 Seve & Exit Sub Required information Ruiz Co provides the following sales forecast for the next four months Sales units) The company wants to end each month with ending finished goods inventory equal to 30% of next month's forecasted sales. Finished goods inventory on Aprilis 207 units Assume July's budgeted production is 720 units. In addition, each finished unit requires four pounds (lbs) of raw materials and the company wants to end each month with raw materials inventory equal to 40% of next month's production needs Beginning raw materials inventory for April was 1142 pounds. Assume direct materials cost $3 per pound. Prepare a direct materials budget for April, May, and June (Round your intermediate calculations and final answers to the nearest whole dollar amount.) RUIZ CO. Direct Materials Budget For April May, and June April May June 8321 720 units Hudgeted production (units) Materials requirements per unit Materials needed for production (lbs) Budgeted ending inventory (lbs) Total materials requirements (bs) Beginning inventory (bs) Materials to be purchased lbs) Total budgeted direct materials cost < Prey 2 of 7 Next > 625 PM

please fully solve and show steps/calculations. thank you

Answer 1

Solution

Ruiz Company
Direct material Budget
For april may and june
	April	May	June
Budgeted Production (unis)	714	755	747
Raw material required per unit (Lbs)	4	4	4
rawmaterial needed for Production (lbs)	2856	3020	2988
Budgeted Ending Inventory (lbs)	1208	1195	1152
Total material requirements (lbs)	4064	4215	4140
Beginning Inventory (Lbs)	1142	1208	1195
material to be Purchased (lbs)	2922	3007	2945
Cost per lb.	$                        3	$                     3	$                       3
Total budgeted direct material cost	$                8,766	$             9,021	$               8,835

*720 x 4 x 40%

Please leave comment if any of the above column do not match.

For solution we need to first calculate Budgeted units to be produced.

Production and Raw material purchase budget
	April	May	June	July
Units to be sold	690	770	720	810
Desired Ending Finished Inventory	231	216	243
Total Units needed	921	986	963
Less : Beginning Finished Inventory	207	231	216
Units to be Produced	714	755	747