Required information Use the following information for the Exercises below. Ruiz
ID: 2510399 • Letter: R
Question
Required information
Use the following information for the Exercises below.
Ruiz Co. provides the following sales forecast for the next four months:
The company wants to end each month with ending finished goods inventory equal to 20% of next month's forecasted sales. Finished goods inventory on April 1 is 130 units. Assume July's budgeted production is 680 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 20% of next month’s production needs. Beginning raw materials inventory for April was 799 pounds. Assume direct materials cost $4 per pound.
Exercise 7-3 Manufacturing: Production budget LO P1
Prepare a production budget for the months of April, May, and June.
7-4 Required information
Use the following information for the Exercises below.
Ruiz Co. provides the following sales forecast for the next four months:
The company wants to end each month with ending finished goods inventory equal to 20% of next month's forecasted sales. Finished goods inventory on April 1 is 138 units. Assume July's budgeted production is 720 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 1,271 pounds. Assume direct materials cost $6 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.)
Explanation / Answer
April May June July Sales Units 690 770 720 810 Production Budget: April May June July Sales Units 690 770 720 810 Add: Desired Closing FG 154 144 162 (20% of Next Month Sales) Total Needs 844 914 882 Less: Opening Stock 138 154 144 Production to be Done 706 760 738 720 (Given) Direct Material Budget April May June July Production to be Done 706 760 738 720 Material Required (Production *6 Pounds) 4236 4560 4428 4320 Add: Desired Closing Inventory 1368 1328.4 1296 (30% of Next Month Production Needs) Total Needs 5604 5888.4 5724 Less: Opening Stock 1271 1368 1328.4 Raw Material to be Purchased in Units 4333 4520.4 4395.6 Raw Material to be Purchased in Value 25998 27122.4 26373.6 (Units *6)
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