Question

1.

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

	April		May		June		July
Sales (units)	600		680		630		720

The company wants to end each month with ending finished goods inventory equal to 30% of next month's forecasted sales. Finished goods inventory on April 1 is 180 units.

Prepare a production budget for the months of April, May, and June.

2.

Zira Co. reports the following production budget for the next four months.

	April		May		June		July
Production (units)	674		715		707		687

Each finished unit requires four 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 809 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.)

3.The production budget for Manner Company shows units to be produced as follows: July, 630; August, 690; and September, 550. Each unit produced requires three hours of direct labor. The direct labor rate is currently $16 per hour but is predicted to be $16.75 per hour in September.

Prepare a direct labor budget for the months July, August, and September.

4.

Required information

Ramos Co. provides the following sales forecast and production budget for the next four months.

	April		May		June		July
Sales (units)	550		630		580		650
Budgeted production (units)	490		620		590		590

The company plans for finished goods inventory of 170 units at the end of June. In addition, each finished unit requires 6 pounds of direct materials and the company wants to end each month with direct materials inventory equal to 25% of next month’s production needs. Beginning direct materials inventory for April was 735 pounds. Direct materials cost $3 per pound. Each finished unit requires 0.60 hours of direct labor at the rate of $21 per hour. The company budgets variable overhead at the rate of $25 per direct labor hour and budgets fixed overhead of $8,500 per month.

5.

Required information

Ramos Co. provides the following sales forecast and production budget for the next four months.

	April		May		June		July
Sales (units)	550		630		580		650
Budgeted production (units)	490		620		590		590

The company plans for finished goods inventory of 170 units at the end of June. In addition, each finished unit requires 6 pounds of direct materials and the company wants to end each month with direct materials inventory equal to 25% of next month’s production needs. Beginning direct materials inventory for April was 735 pounds. Direct materials cost $3 per pound. Each finished unit requires 0.60 hours of direct labor at the rate of $21 per hour. The company budgets variable overhead at the rate of $25 per direct labor hour and budgets fixed overhead of $8,500 per month.

1. Prepare a direct labor budget for April, May, and June.
2. Prepare a factory overhead budget for April, May, and June.

Prepare a direct materials budget for April, May, and June.

Answer 1