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)	584		625		617		597

Each finished unit requires four pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next months production needs. Beginning raw materials inventory for April was 701 pounds. Assume direct materials cost $5 per pound.