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Question - Cassidy's 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 - 21,000 units
March - 26,000 units
April - 33,000 units
The company wants to maintain monthly ending inventories of Material A equal to 29% of the next month's production needs. Material A costs $1.75 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.
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