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18 February, 01:05

Zira Co. reports the following production budget for the next four months. April May June July Production (units) 632 660 666 646 Each finished unit requires four pounds 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 506 pounds. Assume direct materials cost $4 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.)

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  1. 18 February, 04:05
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    Results are below.

    Explanation:

    Giving the following information:

    Production:

    April = 632

    May = 660

    June = 666

    July = 646

    Standard quantity per unit = 4 pounds of raw materials

    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 506 pounds.

    Assume direct materials cost $4 per pound.

    Raw materials budget:

    April (in pounds):

    Production = 632*4 = 2,528

    Desired ending inventory = (660*0.2) * 4 = 528

    Beginning inventory = (506)

    Total pounds = 2,550

    Total cost = 2,550*4 = $10,200

    May (in pounds):

    Production = 660*4 = 2,640

    Desired ending inventory = (666*0.2) * 4 = 533

    Beginning inventory = (528)

    Total pounds = 2,645

    Total cost = 2,645*4 = $10,580

    June (in pounds):

    Production = 666*4 = 2,664

    Desired ending inventory = (646*0.2) * 4 = 517

    Beginning inventory = (533)

    Total pounds = 2,648

    Total cost = 2,648*4 = $10,592
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