7-4) Required information Use the following information for the Exercises below.
ID: 2523384 • Letter: 7
Question
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.)
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7-3) 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.
Explanation / Answer
Answer 7-4 Production Budget April May June Total July Sales In units 690.00 770.00 720.00 2,180.00 810.00 Add: Ending Inventory in units 154.00 144.00 162.00 162.00 Total Needs 844.00 914.00 882.00 2,342.00 Less: Beginning Inventory in units (138.00) (154.00) (144.00) (138.00) Required Production in Units 706.00 760.00 738.00 2,204.00 Direct Materials Budget April May June Total July Required Production in Units 706.00 760.00 738.00 2,204.00 720.00 Direct Material required per Unit in lbs. 6.00 6.00 6.00 6.00 6.00 Total Bamboo required for Production 4,236.00 4,560.00 4,428.00 13,224.00 4,320.00 Add: Ending Direct Material Inventory in lbs 1,368.00 1,328.00 1,296.00 1,296.00 Total Needs 5,604.00 5,888.00 5,724.00 14,520.00 Less: Beginning Direct Material Inventory in lbs (1,271.00) (1,368.00) (1,328.00) (1,271.00) Raw Material Purchased in feets 4,333.00 4,520.00 4,396.00 13,249.00 Cost of Direct Material per lvs 6.00 6.00 6.00 6.00 6.00 Cost of Direct Material Purchased 25,998.00 27,120.00 26,376.00 79,494.00 Answer 7-3 Production Budget April May June Total July Sales In units 650.00 730.00 680.00 2,060.00 770.00 Add: Ending Inventory in units 146.00 136.00 154.00 154.00 Total Needs 796.00 866.00 834.00 2,214.00 Less: Beginning Inventory in units (130.00) (146.00) (136.00) (130.00) Required Production in Units 666.00 720.00 698.00 2,084.00
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