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Rad Co. provides the following sales forecast and production budget for the next four months: The company plans for finished goods inventory of 290 units
Rad Co. provides the following sales forecast and production budget for the next four months: The company plans for finished goods inventory of 290 units at the end of June. In addition, each finished unit requires five pounds of raw materials at cost of $2.00 per pound, and the company wants to end each month with raw materials inventory equal to 20% of next month's production needs. Beginning raw materials inventory for April was 610 pounds. Each finished unit requires 0.50 hours of direct labor at the rate of $16 per hour. The company budgets variable overhead at the rate of $20 per direct labor hour and budgets fixed overhead of $9,700 per month. Prepare a raw materials budget for April, May, and June. Prepare a raw materials budget for April, May, and June
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