The company wants to maintain monthly ending inventories of

Reference no: EM13597339

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 14,000 units
March 15,500 units
April 11,900 units

The company wants to maintain monthly ending inventories of Material A that are equal to 20% of the following month's production needs. The cost of Material A is $0.80 per yard. The company is in the process of preparing a direct materials purchases budget.

Calculate the total cost of Material A to be purchased in February. Do not use decimals in your answer.

Reference no: EM13597339

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