Question
Ruiz Co. provides the following sales forecast for the next four months: April May June July Sales (units) 650 730 680 770 The company wants
Ruiz Co. provides the following sales forecast for the next four months: April May June July Sales (units) 650 730 680 770 The company wants to end each month with ending finished goods inventory equal to 40% of next month's forecasted sales. Finished goods inventory on April 1 is 260 units. Assume July's budgeted production is 680 units. In addition, each finished unit requires four 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 1,091 pounds. Assume direct materials cost $5 per pound.
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