Rad Co. provides the following sales forecast and production budget for the next four months:

The company plans for finished goods inventory of 120 units at the end of June. In addition, 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 663 pounds. Each finished unit requires 0.50 hours of direct labor at the rate of $ 16 per hour. The company budgets variable overhead at the rate of $ 20 per direct labor hour and budgets fixed overhead of $ 8,000 per month.
Prepare a raw materials budget for April, May, andJune.

  • CreatedNovember 29, 2013
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