Orr Company makes and sells a single product. The company is in the process of preparing a
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Orr Company makes and sells a single product. The company is in the process of preparing a direct materials purchases budget and has provided the following information: 1. It takes three yards of direct materials to produce one unit of this product. 2. Direct materials cost $1.20 per yard to purchase. 3. 15,600 units are budgeted to be produced in May. 4. The budgeted direct materials inventory balance at June 30 is $12,870. 5. Orr Company has budgeted the total cost of direct materials to be purchased in May to be $58,230. 6. Orr Company wants to maintain monthly ending inventories of direct materials equal to 25% of the following month's production needs. Calculate the total cost of direct materials to be purchased in June.
Related Book For
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
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