Zira Company reports the following production budget for the next four months. Each finished unit requires six pounds of direct materials, and the company wants to end each month with direct materials inventory equal to 40% of next month's production needs. Beginning direct materials inventory for April was 1,450 pounds. Direct materials cost $4 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 604 645 637 Units to produce Materials to be purchased 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 617 ZIRA COMPANY Direct Materials Budget April $ 4 0 0 0 $ May 0 0 0 $ June 0 0 0 pounds
Zira Company reports the following production budget for the next four months. Each finished unit requires six pounds of direct materials, and the company wants to end each month with direct materials inventory equal to 40% of next month's production needs. Beginning direct materials inventory for April was 1,450 pounds. Direct materials cost $4 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 604 645 637 Units to produce Materials to be purchased 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 617 ZIRA COMPANY Direct Materials Budget April $ 4 0 0 0 $ May 0 0 0 $ June 0 0 0 pounds
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
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 helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
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 income and expenses.
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Transcribed Image Text:Zira Company reports the following production budget for the next four months. Each finished unit requires six pounds of direct
materials, and the company wants to end each month with direct materials inventory equal to 40% of next month's production needs.
Beginning direct materials inventory for April was 1,450 pounds. Direct materials cost $4 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
604
645
637
Units to produce
Materials to be purchased
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
617
ZIRA COMPANY
Direct Materials Budget
April
$
4
0
0
0 $
May
0
0
0 $
June
0
0
0
pounds
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