Question

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: Multiple Choice $4,506,700 $5,572,600 $1,488,850 $5,302,000

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 September October November December 24,100 units 22,800 units 24,200 units 25,400 units 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:

Answer 1

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Answer The correct answer is $ 5302000 s The total cost of purchase of jurision (ending inventory +required for production - ending inventory)* rate per kilogram ((22800*8.5*25%) +(24100*8.5)-12300) *22 =$ 5302000 0 1 Thus the correct answer is $5302000 2 3 For any help please comment in the comment box 4 5 Thank You