Caspion Corporation Makes and Sells a Product Called a Miniwarp

question 130

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:

Edisonian

Pertaining to Thomas Edison, often referring to his inventive approach that emphasizes trial and error and persistence.

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