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2 December, 18:52

The company wants to end each month with ending finished goods inventory equal to 25% of next month's sales. Finished goods inventory on April 1 is 190 units. Assume July's budgeted production is 540 units. In addition, each finished unit requires five pounds 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 663 pounds. Assume direct materials cost $4 per pound. Prepare a direct materials budget for April, May, and June.

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  1. 2 December, 19:07
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    Direct Materials budget

    April May June July

    budgeted production (units) 455 570 560 540

    pound per unit 5 5 5 5

    materials needed for production 2275 2850 2800 2700

    budgeted ending inventory 855 840 810

    total materials requirement 3130 3690 3610

    Beginning inventory (lbs) - 663 - 855 - 840

    materials to be purchased 2467 2835 2770

    materials price per pound 4 4 4

    total cost. 9868 11340 11080
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