Caspion Corporation Makes and Sells a Product Called a Miniwarp

question 225

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 desired ending inventory of Jurislon for September is:

• A) $81,720
• B) $76,680
• C) $191,700
• D) $204,300