Question

Orr Company makes and sells a single product.  The company is in
the process of preparing a direct materials purchases budget and
has provided the following information:

1.  It takes three yards of direct materials to produce one unit of
    this product.
2.  Direct materials cost $1.20 per yard to purchase.
3.  15,600 units are budgeted to be produced in May.
4.  The budgeted direct materials inventory balance at June 30 is
    $12,870.
5.  Orr Company has budgeted the total cost of direct materials to be
    purchased in May to be $58,230.
6.  Orr Company wants to maintain monthly ending inventories of direct
    materials equal to 25% of the following month's production needs.

Calculate the total cost of direct materials to be purchased in June.

Answer 1