Question

Rida, Inc., a manufacturer in a seasonal industry, is preparing its direct materials budget for the second quarter. It plans production of 238,000 units in the second quarter and 275,500 units in the third quarter. Raw material inventory is 65,500 pounds at the beginning of the second quarter. Other information follows:

Direct materials		Each unit requires 0.60 pounds of a key raw material, priced at $188 per pound. The company plans to end each quarter with an ending inventory of materials equal to 50% of next quarter’s budgeted materials requirements.

Prepare a direct materials budget for the second quarter.

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Ruiz Co. provides the following sales forecast for the next four months:

	April		May		June		July
Sales (units)	520		600		550		640

The company wants to end each month with ending finished goods inventory equal to 20% of next month's forecasted sales. Finished goods inventory on April 1 is 104 units. Assume July's budgeted production is 550 units. In addition, each finished unit requires four 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 429 pounds. Assume direct materials cost $5 per pound.

Prepare a production budget for the months of April, May, and June.

Prepare a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

Answer 1