Question

Required information Use the following information for the Exercises below. Ruiz Co. provides the following sales forecast for the next four months Sales (units) Aoril 580 May 660 June 612 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 materials inventory equal to 20% of next month's production needs. Beginning raw materials inventory for April was 725 pounds Assume direct materials cost $4 per pound Exercise 7.4 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) RUVCO Direct Materials Budget For April May, and June April May. Materials needed for production (lbs) Total materiais requirements ) Material to be purchased (b ) Totalbuted direct materials cost

Answer 1

Direct Materials Budget:	April	May	June	July
Total finished goods required in units (a)	604	645	637	610
Direct materials required in pounds for one unit (b)	6	6	6	6
Materials needed for production (a*b)	3,624	3,870	3,822	3,660
Add: Desired ending direct materials (3,870*20/100); (3,822*20/100); (3,660*20/100)	774	764	732
Total materials requirements in pounds	4,398	4,634	4,554
Less: Beginning direct materials (last month's ending raw materials will be the beginning raw materials of current month)	725	774	764
Materials to be purchased (c )	3,673	3,860	3,790
Raw materials per pound (d)	$4	$4	$4
Total budgeted direct materials cost (c * d)	$14,692	$15,442	$15,160

Working notes:

	April	May	June	July
Estimated Sales in units	580	660	610	700
Add: Desired finished goods ending inventory (660*30/100); (610*30/100); (700*30/100)	198	183	210
Total units required	778	843	820
Less: Beginning finished goods inventory (last month's ending inventory will be the beginning inventory of current month)	174	198	183
Total finished goods required in units	604	645	637	610