Required information Ruiz Co provides the following sales fo

Required information

Ruiz Co. provides the following sales forecast for the next four months:

   

	April		May		June		July
Sales (units)	550		630		580		670

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 (lbs.) 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. Prepare a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers to the nearest whole dollar amount.) RUIZ CO Direct Materials Budget For April, May, and June April May June Materials needed for production (lbs.) Total materials requirements (lbs.) Materials to be purchased (lbs.) Total budgeted direct materials cost

Solution

RUIZ CO.

Production Budget

For April, May, June

April

May

June

July

Budgeted sales (units) for the month

550

630

580

670

Add: Ending finished goods inventory

252

232

268

Less: Beginning finished goods inventory

220

252

232

Budgeted production units

582

610

616

580

RUIZ CO.

Direct Material Budget

For April, May, June

April

May

June

Total

Units to be produced

582

610

616

1,198

Material requirement per units (lbs.)

5

5

5

5

Material needed for production (lbs.)

2,910

3,050

3,080

Add: Ending material inventory

1,220

1,232

*1,160

Total material requirement

4,130

4,282

4,240

Less: Beginning material inventory

1,164

1,220

1,232

Materials to be purchased (lbs.)

2,966

3,062

3,008

9,036

Cost of material per lbs.

$6

$6

$6

$6

Total Budgeted direct materials cost

$ 17,796

$ 18,372

$ 18,048

$ 54,216

*1,160 = 580 x 5 x 0.4

RUIZ CO.
Production Budget
For April, May, June
	April	May	June	July
Budgeted sales (units) for the month	550	630	580	670
Add: Ending finished goods inventory	252	232	268
Less: Beginning finished goods inventory	220	252	232
Budgeted production units	582	610	616	580