Question
Ruiz Co. provides the following sales forecast for the next four months: April May June July Sales (units) 540 620 570 660 The company wants
Ruiz Co. provides the following sales forecast for the next four months:
April | May | June | July | |||||
Sales (units) | 540 | 620 | 570 | 660 | ||||
The company wants to end each month with ending finished goods inventory equal to 30% of next month's forecasted sales. Finished goods inventory on April 1 is 162 units. Assume July's budgeted production is 570 units. In addition, each finished unit requires five pounds (lbs.) of raw materials and the company wants to end each month with raw materials inventory equal to 40% of next months production needs. Beginning raw materials inventory for April was 1,128 pounds. Assume direct materials cost $4 per pound.
Prepare a production budget for the months of April, May, and June.
RUIZ CO. Production Budget For April, May, and June April Next month's budgeted sales (units) 620 Ratio of inventory to future sales 30% May June 570 660 Required units of available production Units to be producedStep by Step Solution
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