Required information Ruiz Co. provides the following sales forecast for the next
ID: 2395492 • Letter: R
Question
Required information Ruiz Co. provides the following sales forecast for the next four months: April My June July 630 580 670 Sales (units) 550 The company wants to end each month with ending finished goods inventory equal to 40% of next month's forecasted sales. Finished goods inventory on April 1 is 220 units. Assume July's budgeted production is 580 units. In addition, each finished unit requires five pounds (Ibs.) 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 1,164 pounds. Assume direct materials cost $6 per pound.Explanation / Answer
Answers
Working
April
May
June
A
Next months budgeted sales
630
580
670
B
Ratio of Inventory
40%
40%
40%
C = A x B
Budgeted Ending Inventory
252
232
268
D
Budgeted Unit Sales
550
630
580
E = C+D
Required Units of available production
802
862
848
F
Budgeted Beginning Inventory
220
252
232
G = E - F
Units to be produced
582
610
616
Direct Material Budget
Working
April
May
June
A
Budgeted Production
582
610
616
B
Material requirement per unit
5
5
5
C=A x B
Material needed for production
2,910
3,050
3,080
D = 40% of next month's 'C'
Budgeted Ending Inventory
1,220
1,232
1,160
E = C+D
Total material requirements
4,130
4,282
4,240
F
Beginning Inventory
1,164
1,220
1,232
G = E - F
Material to be purchased
2,966
3,062
3,008
H
Cost of material per pound
$ 6.00
$ 6.00
$ 6.00
I = G x H
Total budgeted direct material cost
$ 17,796.00
$ 18,372.00
$ 18,048.00
Working
April
May
June
A
Next months budgeted sales
630
580
670
B
Ratio of Inventory
40%
40%
40%
C = A x B
Budgeted Ending Inventory
252
232
268
D
Budgeted Unit Sales
550
630
580
E = C+D
Required Units of available production
802
862
848
F
Budgeted Beginning Inventory
220
252
232
G = E - F
Units to be produced
582
610
616
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.