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Question - Orr Company 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 three months is as follows:
Budgeted Biks to be Produced
February
15,000 units
March
18,500 units
April
17,200 units
The company wants to maintain monthly ending inventories of Material A equal to 25% of the next month's production needs. The cost of material A is $1.20 per yard. The company is in the process of preparing a direct materials purchases budget.
Calculate the total cost of material A budgeted to be purchased in March. Do not use decimals in your answer.
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