Casper Corporation Makes and Sells a Product Called a Miniwarp

question 62

Multiple Choice

Casper Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 3.5 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 10% of the following month's production needs. On July 31, this requirement was not met since only 6,900 kilograms of Jurislon were on hand. The cost of Jurislon is $3.00 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)$233,625
• B)$407,700
• C)$214,200
• D)$212,925

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Definitions:

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