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 months sales. Finished goods inventory on April 1 is 190 units. Assume Julys budgeted production is 540 units. 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 months 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 20-4 Manufacturing: Direct materials budget LO P1 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. 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. HOSPITABLE CO. Direct Materials Budget For April, May, and June June April May 455 570 560 units Budgeted production (units) Beginning inventory (lbs.) Materials needed for production Budgeted ending inventory (lbs.) Total materials requirements Beginning inventory lbs.) Materials to be purchased Materials price per pound Total cost