Exercise 20-8 (Algo) Manufacturing: Direct materials budget LO P1 Zira Company reports the following production budget for the next four months. Each finished unit requires five pounds of direct materials, and the company wants to end each month with direct materials inventory equal to 30% of next month's production needs. Beginning direct materials inventory for April was 843 pounds. Direct materials cost $6 per pound. Prepare a direct materials budget for April, May, and June. (Round your answers to the nearest whole number.) April Units to produce 562 May 590 June July 596 576
Exercise 20-8 (Algo) Manufacturing: Direct materials budget LO P1 Zira Company reports the following production budget for the next four months. Each finished unit requires five pounds of direct materials, and the company wants to end each month with direct materials inventory equal to 30% of next month's production needs. Beginning direct materials inventory for April was 843 pounds. Direct materials cost $6 per pound. Prepare a direct materials budget for April, May, and June. (Round your answers to the nearest whole number.) April Units to produce 562 May 590 June July 596 576
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Exercise 20-8 (Algo) Manufacturing: Direct materials budget LO P1
Zira Company reports the following production budget for the next four months. Each finished unit requires five pounds of direct
materials, and the company wants to end each month with direct materials inventory equal to 30% of next month's production needs.
Beginning direct materials inventory for April was 843 pounds. Direct materials cost $6 per pound.
Prepare a direct materials budget for April, May, and June. (Round your answers to the nearest whole number.)
Units to produce
April
562
May
June
590
596
July
576
Units to produce
Materials required per unit
Materials needed for production (pounds)
Total materials required (pounds)
Materials to purchase (pounds)
Cost of direct materials purchases
ZIRA COMPANY
Direct Materials Budget
April
May
June
562
590
596 units
0
0
0
0
0
0
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