Question

Required information Use the following information for the Exercises below Ruiz Co. provides the following sales forecast for the next four months AprilMay June July 770 Sales (units) 650 730 680 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 195 units. Assume July's budgeted production is 680 units. In addition, each finished unit requires four pounds (Ibs.) 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 539 pounds Assume direct materials cost $3 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.) RUIZ CO Direct Materials Budget For April, May, and June April June Materials needed for production (lbs.) Total materials requirements (Ibs.) Materials to be purchased (Ibs.) Total budgeted direct materials cost

Answer 1

		RUIZ Co.							RUIZ Co.
		Direct Materials Budget							Production Budget
		For April, May and June								April	May	June	July
			April	May	June	July			Sales	650	730	680	770
		Production Budget	674	715	707	680			Add: Desired Closing Inventory	219	204	231		(30% of Following Month)
		Material Required PU	4	4	4	4			Total Required	869	934	911
		Material Needed for Production (LBS)	2696	2860	2828	2720			Less: Opening Inventory	195	219	204
		Add: Desired Closing Inventory of RM	572	565.6	544		(20% of Following Month)		Production Budget	674	715	707
		Total Material Requirement(LBS)	3268	3425.6	3372
		Less: Opening Inventory	539	572	565.6
		Material to be Purchased (LBS)	2729	2853.6	2806.4
		Material Rate Per Pound	3	3	3
		Total Budgeted Direct Material Cost	8187	8561	8419