Question

# Zira Co. reports the following production budget for the next four months. April May June July...

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

 April May June July Production (units) 594 635 627 607

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 891 pounds. Assume direct materials cost \$3 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.)

Preparation of a direct materials budget for April, May, and June:

 Particulars April May June Raw material required for production 2,970 Pounds 3,175 Pounds 3135 pounds Less: Beginning raw material inventory (891 pounds) (953 pounds) (941 pounds) Add: Ending raw material inventory 953 pounds 941 pounds 911 pounds Raw materials to be purchased 3032 pounds 3,163 pounds 3,105 pounds Purchase price of raw material@3 per pound \$9,096 \$9,489 \$9,315

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