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Dustman Manufacturing Corporation's most recent production budget indicates the following required production:
Required production (units)
January 4,000
February 6,000
March 5,500
April 5,000
Problem 1: Each unit of finished product requires 3 feet of raw materials. The company maintains raw materials inventory equal to 2,000 feet plus 10% of the next month's expected production needs. The raw material used in Dustman Manufacturing Corporation's product costs $4.50 per foot. What is the value of raw material that Dustman Manufacturing should plan on purchasing for the month of February?
Option 1: $73,575
Option 2: $81,000
Option 3: $80,325
Option 4: $74,250
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