(Answered) Problem - ruiz co provides the following sales forecast for

Accounting

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

	April	May	June	July
Sales (units)	620	700	650	740

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 186 units. Assume July's budgeted production is 650 units. In addition, each finished unit requires five pounds (lbs.) 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 644 pounds. Assume direct materials cost $3 per pound.

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

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