Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 10.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August23,400?units??September22,100?unitsOctober23,500?unitsNovember24,700?unitsDecember24,400?unitsThe 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 11,600 kilograms of Jurislon were on hand. The cost of Jurislon is $26 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.The total cost of Jurislon to be purchased in August is:
A. $7,293,260
B. $6,388,200
C. $1,723,280
D. $7,594,860
Answer: A
Business
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