Castil Corporation Makes and Sells a Product Called a Miniwarp

question 62

Multiple Choice

Castil 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 9,700 kilograms of Jurislon were on hand. The cost of Jurislon is $5.00 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.
-The desired ending inventory of Jurislon for the month of September is:

• A) $20,900
• B) $52,000
• C) $52,250
• D) $20,800

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