Question

Orr Company makes and sells a single product called a Bik. It takes four
yards of Material A to make one Bik. Budgeted production of Biks for the
next three months is as follows:

                  Budgeted Biks to be Produced
February               15,000 units
March                  17,000 units
April                  21,000 units

The company wants to maintain monthly ending inventories of Material A
equal to 53% of the next month's production needs. Material A costs
$1.20 per yard. The company is in the process of preparing a direct
materials purchases budget.

Calculate the total cost of material A budgeted to be purchased in March.

Answer 1