Budgeting Material Costs The Maxwell Company uses a single raw material to make its product; for each unit of product, three pounds of this material are required. The price of this material is $10 per pound. The company follows a purchasing policy of placing orders on or before the fifth of each month to cover that month’s requirements. It plans its inventory position in advance, to cover expected situations.

The inventory of material at June 30, 19-1 was 9,000 pounds The inventory level planned for July 31 was 15,000 pounds The inventory level planned for August 31 was 35,000 pounds The inventory level planned for September 30 was 20,000 pounds Production scheduled for the three-month period was:

During July, 10,000 units of product During August, 12,000 units of product During September, 15,000 units of product Suppose that this set of plans is carried out. What will be the total cost of materials purchased for the month of July? August? September?

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