Question

Ch 600 550 on April 1 is 156 units. Assume July's budgeted production is 550 units. In addition, each Exercise 7-4 Manufacturing: Direct materials budget LO P1 whole dollar Total to be

Answer 1

Ans.	RUIZ CO.
	Direct Materials Budget
	For April , May and June
		April	May	June
	Required production in units (a)	544	585	577
	Materials requirement per unit (b)	4	4	4
	Materials needed for production (a*b)	2176	2340	2308
	Add: Ending raw materials inventory	936	923	880
	Total needs	3112	3263	3188
	Less: Beginning raw materials inventory	-870	-936	-923
	Raw materials to be purchased ©	2242	2327	2265
	Total cost of purchases (c * $4)	8968	9308	9060
	Total cost of purchases =   Required materials to be purchased * Cost per unit
	*Ending inventory for current month = Total needs of next month * 40%
	*Beginning inventory for current quarter = Ending inventory of previous quarter
	*Calculations for Ending inventory:			*Calculations for Beginning inventory:
	Months			Months
	April	2340 * 40%	936	April	given		870
	May	2308 * 40%	923	May	(Ending inventory of April)		936
	June	2200 * 40%	880	June	(Ending inventory of May)		923
	Total needs for July   = budgeted production for July * Materials required per unit
		550 * 4
		2200
	*Calculation of No. of units produced:
	Production Budget
	Particulars	April	May	June
	Expected units to be sold	520	600	550
	Add: Desired ending inventory units	180	165	192
	Total required units	700	765	742
	Less: Beginning inventory units	-156	-180	-165
	Units to be produced	544	585	577
	Ending finished goods inventory = Next month's sales * 30%			Beginning finished goods inventory =   Ending inventory of previous month
	April	600 * 30%		April	156	(given)
	May	550 * 30%		May	180
	June	640 * 30%		June	165