Calculate the total cost of material a

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Problem - 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                  18,000 units

April                    17,000 units

The company wants to maintain monthly ending inventories of Material A equal to 20% of the next month's production needs. The cost of material A is $1.25 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.

Reference no: EM131643227

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