Question

Zira Co. reports the following production budget for the next four months.

	April		May		June		July
Production (units)	622		650		656		636

Each finished unit requires four pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs. Beginning raw materials inventory for April was 746 pounds. Assume direct materials cost $5 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.)
ZIRA CO. Direct Materials Budget For April, May, and June April May June 622 650 656 units 4 lbs. 2,488 2,600 2,624 lbs. Budgeted production (units) Materials requirements per unit Materials needed for production (lbs.) Budgeted ending inventory (lbs.) Total materials requirements (lbs.) Beginning inventory (lbs.) Materials to be purchased (lbs.) Cost per Ib. Total budgeted direct materials cost 746 780 787 lbs. $ 5 $ 5 $ 5 per Ib.

Answer 1

Zira Co Direct Materials Budget For April May June April May Budgeted Production Units (units) 622 650 Materials Requirements per unit (lb) 4 4 Materials needed for production (lbs) 2488 2600 Budgeted Ending Inventory (lbs) L 780 787.2 Total Material requirements (lbs) 3268 3387.2 Beginning Inventory (lbs) 746 780 Materials to be purchased (lbs) 2522 2607.2 Cost per lb $ 5 $ 5 Total budgeted direct material cost $12,610 $13,036 June 656 4 2624 763.2 (636*4*30%) 3387.2 787 2600.2 $ 5 $13,001