Cashan Corporation Makes and Sells a Product Called a Miniwarp

question 168

Multiple Choice

Cashan Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 1.5 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 30% of the following month's production needs. On July 31, this requirement was not met since only 10,400 kilograms of Jurislon were on hand. The cost of Jurislon is $4.00 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)$149,860
• B)$252,400
• C)$191,460
• D)$147,000

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