Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

4E

Expert-verified
Financial & Managerial Accounting
Found in: Page 917
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Refer to the information in Exercise 20-3. 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.

The cost of budgeted direct material for the month of April, May and June will be $9,868, $11,340 and $11,080.

See the step by step solution

Step by Step Solution

Preparation of direct materials budget

Ruiz Co

Direct materials budget

For the month of April, May and June

Particulars

April

May

June

Budgeted production

455

570

560

Multiply: Materials requirement

5

5

5

Materials needed for production

2,275

2,850

2,800

Add: Budgeted ending inventory

855

840

810

Total material requirements

3,130

3,690

3,610

Less: Beginning inventory

663

855

840

Materials purchased

2,467

2,835

2,770

Multiply: Cost

$4

$4

$4

Total budgeted direct material

$9,868

$11,340

$11,080

Notes to accounts

Calculation of budgeted ending inventory

Particulars

April

May

June

July

Budgeted production

455

570

560

540

Multiply: Materials requirement

5

5

5

5

Materials needed for production

2,275

2,850

2,800

2,700

Ending inventory is 30% of the next month’s sales (Given)

April

855

May

840

June

810

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.