Required information Ruiz Co. provides the following sales forecast for the next

Question

Required information Ruiz Co. provides the following sales forecast for the next four months April May June July Sales (units) 58 66 6107e0 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 232 units. Assume July's budgeted production is 610 units. In addition, each finished unit requires six pounds (Ibs.) 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 1,102 pounds. Assume direct materials cost $5 per pound. Prepare a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

Explanation / Answer

Working:

RUIZ CO. Direct Materials Budget For April, May, and June April May June July Budgeted production (units) 612 640 646 610 Materials requirement per unit 6 6 6 6 Materials needed for production (lbs.) 3672 3840 3876 3660 Budgeted ending inventory (lbs.) 1152 1162.80 1098 Total materials requirements (lbs.) 4824 5002.80 4974 Beginning inventory (lbs.) 1102 1152 1162.80 Materials to be purchased (lbs.) 3722 3850.80 3811.20 Cost per lb. $       5.00 $       5.00 $       5.00 Total budgeted direct materials cost 18610 19254 19056

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