Question & Answer: Hospitable Co. provides the following sales forecast for the next four months: The company wants to end each month with ending fi…..

Hospitable Co. provides the following sales forecast for the next four months: The company wants to end each month with ending finished goods inventory equal to 20% of next month’s sales. Finished goods inventory on April 1 is 118 units. Assume July’s budgeted production is 620 units. In addition, each finished unit requires five pounds of raw materials and the company wants to end each month with raw material inventory equal to 20% of next month’s production needs. Beginning raw materials inventory for April was 606 pounds. Assume direct materials cost $4 per pound. Prepare a direct materials budget for April, May, and June.