Question

Zira Co. reports the following production budget for the next four months. April May June July Production (units) 586 640 618 598 Each finished unit requires five pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs. Beginning raw materials inventory for April was 879 pounds. Assume direct materials cost $4 per pound. Prepare a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

	ZIRA CO. Direct Materials Budget For April, May, and June April May June Materials needed for production (lbs.) Total materials requirements (lbs.) Materials to be purchased (lbs.) Total budgeted direct materials cost

Answer 1

Answer-

ZIRA CO.
Direct Material Purchase Budget
Particluars	APRIL	MAY	JUNE
Production units	586	640	618
Pounds required each unit of raw material	5 pounds	5 pounds	5 pounds
Total pounds required	586 units*5 pounds=2930 pounds	640 units*5 pounds=3200 pounds	618 units*5 pounds=3090 pounds
Add:- Closing Inventory 30% of next month production units	3200 pounds*30%=960 pounds	3090 pounds*30%=927 pounds	2990 pounds*30%=897 pounds
Less:- Opening Inventory	879 pounds	960 pounds	927 pounds
Direct material purchase (in pounds) (a)	3011	3167	3060
Material cost per pound (b)	$4	$4	$4
Direct Material cost (c=a*b)	12044	12668	12240