Exercise 20-8 (Algo) Manufacturing: Direct materials budget LO P1 Zira Company reports the following production budget for the next four months. Each finished unit requires five pounds of direct materials, and the company wants to end each month with direct materials inventory equal to 30% of next month's production neec Beginning direct materials inventory for April was 996 pounds. Direct materials cost $5 per pound. Prepare a direct materials budget for April, May, and June. (Round your answers to the nearest whole number.) Units to produce April May June 664 705 697 A Units to produce Materials required per unit Materials needed for production (pounds) Add Desired ending materials inventory (pounds) Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases July 677 ZIRA COMPANY Direct Materials Budget April S S 664 5 3,320 664 3,964 5 S 0 $ May 705 3,525 705 4,230 5 0 S S June 697 units 5 pounds 3,485 pounds 697 pounds 4,182 pounds 5 per pound 0

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It…

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future…