Refer to Exercise 22-8. For April, May, and June, prepare
(1) A direct labor budget
(2) A factory overhead budget.
In exercise 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 5 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, and June.

Transcribed Image Text:

April May June July 500 580 530 600 Budgeted production (units) . .. 442 570 544 540 Sales (units)