Question

Saved Help Save & Exit Su Check my wor Required information Use the following information for the Exercises below. Ruiz Co provides the following sales forecast for the next four months: April May June July Sales (units) 600 680 630 720 The company wants to end each month with ending finished goods inventory equal to 40% of next month's forecasted sales. Finished goods inventory on April 1 is 240 units. Assume July's budgeted production is 630 units. In addition, each finished unit requires five 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 1.264 pounds. Assume direct materials cost $3 per pound. Exercise 20-4 Manufacturing: Direct materials budget LO P1 Prepare a direct materials budget for April, May, and June (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

Answer 1

RUIZ CO.
Production Budget
For April, May, and June
	April	May	June
Next month's budgeted sales (units)	680	630	720
Ratio of inventory to future sales	40%	40%	40%
Budgeted ending inventory (units)	272	252	288
Budgeted unit sales for the month	600	680	630
Required units of available production	872	932	918
Budgeted beginning inventory (units)	240	272	252
Units to be produced	632	660	666

RUIZ CO.
Direct Materials Budget
For April, May, and June
	April	May	June
Budgeted production	632	660	666
(*) Materials requirement per unit	5	5	5
Materials needed for production (lbs.)	3160	3300	3330
(+) Budgeted ending inventory (lbs.) ( 40% of next month's production needs )	1320	1332	1260 [ 630*5*40% ]
Total materials requirements (lbs.)	4480	4632	4590
(-) Beginning inventory (lbs.)	1264	1320	1332
Materials to be purchased (lbs.)	3216	3312	3258
(*) Cost per lb	3	3	3
Total budgeted direct materials cost	9648	9936	9774