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Required information Ramos Co. provides the following sales forecast and production budget for the next four months: April May June July Sales (units) 610 690

Required information

Ramos Co. provides the following sales forecast and production budget for the next four months:

April May June July
Sales (units) 610 690 640 710
Budgeted production (units) 550 680 650 650

The company plans for finished goods inventory of 230 units at the end of June. In addition, each finished unit requires 5 pounds of direct materials and the company wants to end each month with direct materials inventory equal to 30% of next months production needs. Beginning direct materials inventory for April was 825 pounds. Direct materials cost $2 per pound. Each finished unit requires 0.20 hours of direct labor at the rate of $10 per hour. The company budgets variable overhead at the rate of $14 per direct labor hour and budgets fixed overhead of $9,100 per month.

Prepare a direct materials budget for April, May, and June.

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