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Tucan Company manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $300 per ounce; the company maintains an ending platinum inventory equal to 10% of
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21 votes
21 votes
Tucan Company manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $300 per ounce; the company maintains an ending platinum inventory equal to 10% of the following month's production usage. The following data were taken from the most recent quarterly production budget:

July August September
Planned production in units 1,000 11,00 980

The cost of platinum to be purchased to support August production is:_______

User Elnygren
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1 Answer

17 votes
17 votes

Answer:

$163,200

Step-by-step explanation:

Tucan Company

Purchase Budget for the Month of August

Production Requirement ( 11,00 x 0.5 ) 550

Add Closing inventory ( 980 x 0.5 x 10%) 49

Total 599

Less Opening Inventory ( 11,00 x 0.5 x 10%) (55)

Materials Required 544

Cost $300

Total Cost $163,200

User HalfBrian
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3.3k points
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