FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 8.5 kilograms of the raw material Jurislon. Budgeted production of
Miniwarps for the next five months is as follows:
August
24,100 units
September 22,800 units
October
24,200 units
November
25,400 units
December
25,100 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 12,300 kilograms of Jurislon were on hand. The cost of Jurislon is $22 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:
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Transcribed Image Text:Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 8.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 24,100 units September 22,800 units October 24,200 units November 25,400 units December 25,100 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 12,300 kilograms of Jurislon were on hand. The cost of Jurislon is $22 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:
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