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Rida Incorporated is preparing its direct materials budget for the second quarter. It budgets production of 240,000 units in the second quarter and 52,500 units
Rida Incorporated is preparing its direct materials budget for the second quarter. It budgets production of 240,000 units in the second quarter and 52,500 units in the third quarter. Each unit requires 0.60 pound of direct material, priced at $175 per pound. Starting with the second quarter, the company plans to end each quarter with an ending inventory of materials equal to 30% of next quarter's budgeted direct materials required. Raw material inventory is 43,200 pounds at the beginning of the second quarter. Prepare a direct materials budget for the second quarter. (Enter "per unit" answers in two decimal places.) Units to produce RIDA INCORPORATED Direct Materials Budget Second Quarter 240,000 units Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) Cost of direct materials purchases Tyler Company budgets the following unit sales for the next four months: April, 3,000 units; May, 4,000 units; June, 6,000 units; and July, 2,000 units. The company's policy is to maintain finished goods inventory equal to 30% of the next month's unit sales. At the end of March, the company had 900 finished units in inventory. Prepare a production budget for each of the months of April, May, and June. TYLER COMPANY Production Budget April 3,000 May June 4,000 6,000 Budgeted sales units Add: Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales 30% 30% 30% Desired ending inventory units Total required units Less: Beginning inventory units Units to produce
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