Question

y llIUPMation for the Exercises below. Ruiz Co. provides the following sales forecast for the next four months: April May June July 520 600 550 640 Sales (units) he 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 156 units. Assume July's budgeted production is 550 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 30% of next month's production needs. Beginning raw materials inventory for April was 979 pounds. Assume direct materials cost $4 per pound. Exercise 20-4 Manufacturing: Direct materials budget LO P1 repare a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers earest whole dollar amount.) RULZ ?? Direct Materials Budget For April, May, and June April May June Materials needed for production (Ibs.)

Answer 1

PRODUCTION BUDGET
			APRIL	MAY	JUNE	QUARTER	JULY
Budgeted Sales Units			520	600	550	1,670	640
Add: Desired Ending Finished inventory			180	165	192	192
Total Needs			700	765	742	1,862
Less: Beginning Finished Inventory			156	180	165	156
Required Production in units			544	585	577	1,706
RAW MATERIAL PURCHASE BUDGET
			APRIL	MAY	JUNE	QUARTER	JULY
Budgeted Production units			544	585	577	1,706	550
Raw material required per unit			6	6	6	6	6
Total Production needs			3,264	3,510	3,462	10,236	3,300
Add: Desired Ending Inventory			1,053	1,039	990	990
Total needs			4,317	4,549	4,452	11,226
Less: Beginning Inventory			979	1,053	1,039	979
Purchase Units			3,338	3,496	3,413	10,247
Cost price per unit			4.00	4.00	4.00	4.00
Budgeted Purchase in $			13,352	13,982	13,652	40,988