Question

August 23,800 units September 22,500 units October 23,900 units November 25,100 units December 24,800 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 12,000 kilograms of Jurislon were on hand. The cost of Jurislon is $19 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:

Answer 1

the amount of jurison required per unit is not given, so I looked for similar questions and found that 3 kilograms of jurison are needed per unit produced:

total units to be produced during August = 23,800

materials needed per unit = 3

raw materials required for production = 23,800 x 3 = 71,400 kilograms

- beginning inventory = (12,000) kilograms

+ ending inventory required = 22,500 x 3 x 20% = 13,500 kilograms

total raw materials requirement = 72,900 kilograms

purchase price per kilogram of jurison = $19 per kilogram

total cost of raw materials purchases in August = $1,385,100