A company makes and sells a product called Wrap O. One Wrap…
A company makes and sells a product called Wrap O. One Wrap O requires 4.5 kilograms of raw material called FiberX. Budgeted production of Wrap O for the next five months is as follows:August22,800 unitsSeptember21,500 unitsOctober22,900 unitsNovember24,100 unitsDecember23,800 unitsThe company wants to maintain monthly ending inventories of FiberX equal to 20% of the following month’s production needs. On July 31, this requirement was not met since only 11,000 kilograms of FiberX were on hand. The cost of FiberX is $20 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for FiberX for the next five months.In the Direct Materials Budget, what will be shown as the total cost of FiberX to be purchased in August?
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