Question

Zira Co. reports the following production budget for the next four months. Production (units) April 584 May 625 June 617 July 597 Each finished unit requires five 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 876 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 Materials needed for production (is) Total materials requirements (lbs) Materials to be purchased (lbs.) Total budgeted direct materials cost

Answer 1

                                                             

Direct Material Budget for April,May and June is as follows:

ZIRA CO.

                                              Direct Material Budget

                                         For April,May and June

	April	May	June	July
Budgted Production (Units) (A)	584	625	617	597
Material Per Unit (B)	5	5	5	5
Materials needed for production(lbs.) (C = A * B)	2,920	3,125	3,085	2,985
Add: Budgeted ending inventory (D = C * 30%)	938	926	896
Total Material requirements (lbs) (E = C + D)	3,858	4,051	3,981
Begining inventory (F)	876	938	926
Materials Purchased (G = E - F)	2,982	3,113	3,055
Cost per lb	$5	$5	$5
Total budgted direct material cost	$14,910	$15,565	$15,275