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What doxys budgeted total purchase cost of direct materials

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Reference no: EM132667398

Woxy company is considering its forthcoming projections for budget purposes. Doxy's projected sales for next year and beginning and ending inventory data are as follows:

Sales                             50,000 units
Beginning inventory             4,000 units
Desired ending inventory       8,000 units

The selling price is $40 per unit. Each unit requires four pounds of material which costs $6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of the year.

Problem 1: Doxys' budgeted total purchase cost of direct materials would be

Select one:

a. $1,206,000
b. $1,296,000
c. $1,242,000
d. $1,350,000

Reference no: EM132667398

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