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Question - Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 9.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows:
August 24,200 units
September 22,900 units
October 24,300 units
November 25,500 units
December 25,200 units
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 12,400 kilograms of Jurislon were on hand. The cost of Jurislon is $23 per kilogram. The company wants to prepare Direct Materials Purchase Budget for the next five months.
Required - Compute the total cost of Jurislon to be purchased in August?
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