Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The production budget for the next four months.
April= 455 units
May= 570 units
June= 560
July= 540 units
Each finished unit requires five pounds of raw materials.
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 663 pounds. Assume direct materials cost $4 per pound.
Materials required= Production for the month + ending inventory - beginning inventory
April (In pounds):
Production for the month= 455*5= 2,275
Ending inventory= 570*0.30= 171*5= 855
Beginning inventory= (63)
Total pounds= 3,067
Total cost= 3,067*4= $12,268
May (in pounds):
Production for the month= 570*5= 2,850
Ending inventory= 560*0.30= 168*5= 840
Beginning inventory= (855)
Total pounds= 2,835
Total cost= 2,835*4= $11,340
June (in pounds):
Production for the month= 560*5= 2,800
Ending inventory= 540*0.30= 162*5= 810
Beginning inventory= (840)
Total pounds= 2,770
Total cost= $11,080
