Caspion Corporation Makes and Sells a Product Called a Miniwarp

question 185

Multiple Choice

Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 10,800 kilograms of Jurislon were on hand. The cost of Jurislon is $18.00 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:

• A) $1,839,600
• B) $1,014,300
• C) $1,208,700
• D) $1,017,000

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Definitions:

Ignoring Downgrading

The act of deliberately paying less attention or diminishing the importance of certain information or entities.

Exaggerate Differences

The tendency to amplify or overstate the variations or distinctions between people, objects, or information.

Undesirable Alternatives

Options in a decision-making process that are considered less appealing or unfavorable compared to others, often leading to a dilemma or suboptimal choice.

Equally Desirable

A situation or choice where all available options are perceived to have the same value or appeal.