Units to produce April May 620 750 June July 720 720 Each finished unit requires 5 pounds of direct materials. 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 930 pounds. Direct materials cost $2 per pound. Prepare a direct materials budget for April, May, and June. RAMOS COMPANY Direct Materials Budget April May June 620 750 720 units 5 5 5 pounds 2,400 915 Units to produce Materials required per unit Materials needed for production (pounds) Add: Desired ending materials inventory (pounds) Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases 930 $ 2.00 $ 2.00 $ 2.00 $ 0 0
Units to produce April May 620 750 June July 720 720 Each finished unit requires 5 pounds of direct materials. 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 930 pounds. Direct materials cost $2 per pound. Prepare a direct materials budget for April, May, and June. RAMOS COMPANY Direct Materials Budget April May June 620 750 720 units 5 5 5 pounds 2,400 915 Units to produce Materials required per unit Materials needed for production (pounds) Add: Desired ending materials inventory (pounds) Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases 930 $ 2.00 $ 2.00 $ 2.00 $ 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
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.
Sales Budget and Selling
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.
Question
9
Transcribed Image Text:Units to produce
April
620
May June July
750
720
720
Check my work
Each finished unit requires 5 pounds of direct materials. 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 930 pounds.
Direct materials cost $2 per pound. Prepare a direct materials budget for April, May, and June.
ok
nt
RAMOS COMPANY
Direct Materials Budget
April
May
June
int
Units to produce
rences
620
750
720 units
Materials required per unit
Materials needed for production (pounds)
5
5
5 pounds
2,400
Add: Desired ending materials inventory (pounds)
915
Total materials required (pounds)
Less: Beginning materials inventory (pounds)
930
0
Materials to purchase (pounds)
Materials cost per pound
Cost of direct materials purchases
$
2.00
$
2.00
$
2.00
$
0
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