Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 7.5 kilograms...
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Accounting
Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 7.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows:
August
23,100
units
September
21,800
units
October
23,200
units
November
24,400
units
December
24,100
units
The company wants to maintain monthly ending inventories of Jurislon equal to 25% of the following month's production needs. On July 31, this requirement was not met since only 11,300 kilograms of Jurislon were on hand. The cost of Jurislon is $23 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.
The total cost of Jurislon to be purchased in August is:
Multiple Choice
$3,984,750
$4,664,975
$4,924,875
$1,630,700
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