Question

Information about Roboto, a product sold by Roberts, Inc. is as follows: Each unit requires five pounds of material X37. Roberts is planning raw materials needs for the second quarter. Inventory requirements are as follows:

  

a.	The finished goods inventory on hand at the end of each month must be equal to 7,000 units plus 33% of the next month’s sales. The finished goods inventory on March 31 is budgeted based on this requirement.
b.	The raw materials inventory on hand at the end of each month must be equal to one-half of the following month’s production needs for raw materials. The raw materials inventory on March 31 for material X37 is budgeted based on this requirement.
c.	The company maintains no work in process inventories.

  

A sales budget for Roboto for the second and third quarters of the year follows.

  

	Budgeted Sales in Units
April	49,000
May	59,000
June	79,000
July	44,000
August	29,000
September	19,000

  

Required:
1.	Prepare a production budget for Roboto for the months April, May, June and July.

     

Roboto
Production Budget
	April	May	June	July
Budgeted sales
Total needs
Required production

3.	Prepare a direct materials budget showing the quantity of material X37 to be purchased for April, May, June and for the quarter in total.

     

Roboto
Direct Materials Budget
	April	May	June	Second Quarter
Production needs (lbs)
Total Material X37 needs
Material X37 purchases

Answer 1