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What is the cost of budgeted purchases of direct materials

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Problem 1: Dean Manufacturing expects to produce 12,900 units in January and 14,200 units in February. The company budgets $15 per yard for direct materials and each unit has been budgeted 1 yard of material. The amount of indirect materials needed for production has been determined to be insignificant and will therefore not be considered in the calculation. The balance in the Raw Materials Inventory account? (all direct? materials) on January 1 is 3,800 yards. The company desires the ending balance in Raw Materials Inventory to be 23?% of the next? month's direct materials needed for production. What is the cost of the budgeted purchases of direct materials needed for? January?

a. $185,490
b. $193,500
c. $48,990
d. $242,490

Reference no: EM132956620

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