Exercise 07-4 Manufacturing: Direct materials budget LO P1

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

	April		May		June		July
Production (units)	524		565		557		537

Each finished unit requires four pounds of raw materials and the company wants to end each month with raw materials inventory equal to 20% of next months production needs. Beginning raw materials inventory for April was 419 pounds. Assume direct materials cost $5 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.)

ZIRA CO.
Direct Materials Budget
For April, May, and June
	April	May	June
Budgeted production (units)	524	565	557	units
Materials requirements per unit	4	4	4	lbs.
Materials needed for production (lbs.)	2,096	2,260	2,228	lbs.
Budgeted ending inventory (lbs.)	452	446		lbs.
Total materials requirements (lbs.)	2,548	2,706		lbs.
Beginning inventory (lbs.)	419			lbs.
Materials to be purchased (lbs.)	2,129			lbs.
Cost per lb.	$5	$5	$5	per lb.
Total budgeted direct materials cost