A company has budgeted production for the upcoming quarter as follows: January, 37,500 units; February, 41,000 units;
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Question:
A company has budgeted production for the upcoming quarter as follows: January, 37,500 units; February, 41,000 units; and March, 34,500 units. Each unit of product requires 15 pounds of direct materials. The company's policy is to maintain an ending direct materials inventory equal to 12% of the coming month's production requirements. How many pounds of direct materials should be budgeted for purchase in February?
a. 677.100.
b. 603,300.
c. 615,000.
d. 626,700.
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