Question - Castil Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.6 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows:
August 19,400 units
September 20,700 units
October 19,900 units
November 20,400 units
December 21,400 units
The 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 8,700 kilograms of Jurislon were on hand. The cost of Jurislon is $4.8 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
$252,019.
$293,779.
$242,112.
$335,539.