Balmforth Products, Inc

question 48

Multiple Choice

Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget.
-The total cost of Material A to be purchased in February is:

• A)$45,200
• B)$42,900
• C)$39,440
• D)$34,320

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Definitions:

Open Center Circuit

A hydraulic system configuration where fluid returns to the reservoir through the center of the control valve when it is in the neutral position.

Closed-Center Circuit

A hydraulic circuit design where the system pressure is maintained in a closed loop, allowing more efficient fluid control.

Car Carrier Trailers

Specialized types of trailers designed for transporting vehicles from one location to another efficiently and safely.