0 Required information Use the following information for the Exercises below. Ru
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Question
0 Required information Use the following information for the Exercises below. Ruiz Co. provides the following sales forecast for the next four months Apr une Sales (units) 510 590 540 630 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 153 units. Assume July's budgeted production is 540 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 40% of next month's production needs. Beginning raw materials inventory for April was 854 pounds. Assume direct materials cost $5 per pound Exercise 20-3 Manufacturing: Production budget LO P1 Prepare a production budget for the months of Apri, May, and June. RUIZ COExplanation / Answer
Answers
Working
April
May
June
A
Next Month's budgeted sales (units)
590
540
630
B
Ratio of Inventory to future sales
30%
30%
30%
C = A x B
Desired ending Inventory
177
162
189
D
Budgeted sales units
510
590
540
E = C + D
Required Units of available production
687
752
729
F
Beginning inventory units of finished goods
153
177
162
G = E - F
Units to be produced
534
575
567
Working
April
May
June
A
Next Month's budgeted sales (units)
590
540
630
B
Ratio of Inventory to future sales
30%
30%
30%
C = A x B
Desired ending Inventory
177
162
189
D
Budgeted sales units
510
590
540
E = C + D
Required Units of available production
687
752
729
F
Beginning inventory units of finished goods
153
177
162
G = E - F
Units to be produced
534
575
567
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