Question

20, 21 & 22 Help Sav Required information Ruiz Co. provides the following sales forecast for the next four months: Sales units) April 580 May 660 June 610 July 700 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 April 1 is 174 units. Assume July's budgeted production is 610 units. In addition, each finished unit requires six pounds (lbs.) of raw materials and the company wants to end each month with raw material inventory equal to 20% of next month's production needs. Beginning raw materials inventory for Aont was 725 pounds Assume direct materials cost $4 per pound. are a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers to the neare e dollar amount.) RUIZ CO. Direct Materials Budget For April, May, and June April May June < Prev 22 or 27 # Next >

Answer 1

RUIZ CO. Production Budget For April, May, and June April May 660 610 June 700 30% 30% 183) Next month budgeted sales (Units) Ratio of ending Inventory to future sales Budgeted ending inventory (Units) Add : Budgeted unit sales for month Required units of available production Less : Budgeted beginning inventory (Units) Units to be produced 30% 198 580 778 -174 210 610 660) 843 820 -198 -183 604 645) 637 Ending inventory of finished goods = 30% of next month sales units

May 645 June 637 RUIZ CO. Direct Materials Budget For April, May, and June April Total Units of Production 604 No. of Pounds of material required for each unit Material needed for production (lbs) 36241 Add : Ending materials (lbs) 774 Total Material requirments (lbs) 4398 Less : Beginning materials (lbs) -725 Materials to be purchases (lbs) 3673 Material cost per pound Total budgeted direct material cost $ 14,692 $ 3870 764 4634 -774 3860 3822 732 4554 -764 3790 15,442 $ 15,158 Working Notes: Ending materials = 20% of next month production needs June July 637 Total Units of Production Total material needed for production @ 6 lbs each unit 20 % of Production needs May 645 3870 774 38221 764 610 3660 732