Jazz Futons manufactures futons. The estimated number of futon sales for the
first three months of is as follows:
January
February
March
Finished goods inventory at the end of was units. On average,
percent of the futons are produced during the month before they are sold, which
normally accounts for the ending balance in finished goods inventory. The
planned selling price is P per unit.
Jazz Futons buys direct materials for the futons in cloth rolls priced at P each.
Each roll provides direct material for futons. There was one roll in the direct
materials inventory at the beginning of January, and the company expects to have
four rolls in inventory at the end of the month. Assuming the production budget
calls for units to be produced in January, what would be the amount of
the cloth rolls direct materials purchases budget for that month?
