02 Jul Direct material Budget
Refer to Exercises 7-3 and 7-4 in your textbook and answer the questions that follow. Your response should be 2 to 3 pages long, including attachments, and follow APA format.
Hospitable Co. provides the following sales forecast for the next four months:
April May June July
Sales (units). . . . . . . .500 580 540 620
The company wants to end each month with ending finished goods inventory equal to 25% of next month’s sales. Finished goods inventory on April 1 is 190 units. Assume July’s budgeted production is 540 units. Prepare a production budget for the months of April, May, and June.
Refer to the information in Exercise 7-3. In addition, each finished unit requires five 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 663 pounds. Assume direct materials cost $4 per pound. Prepare a direct materials budget for April, May, and June.
Exercise 7-4 Manufacturing: Direct materials budget P1
PS Only peer reviewed references (6) allowed, citations if used MUST match references.
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