y llIUPMation for the Exercises below. Ruiz Co. provides the following sales for
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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.)Explanation / Answer
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
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