Flagstaff Company has budgeted production units of 8,000 for July and 8,200 for August. The direct materials required per unit is 3 ounces (oz.). The company has determined that it wants to have a safety stock of direct materials on hand at the end of each month to complete 25% of the units budgeted in the following month. There were 6,000 ounces of direct material in inventory at the start of July. The total cost of direct materials purchases for the July direct materials budget, assuming the materials cost $1.20 per ounce, is:

A) $28,800.

B) $28,980.

C) $21,600.

D) $28,620.

E) $36,180.

Answer rating: 100% (QA)

Materials production Budget Budgeted production ounces per u... View the full answer