2)

Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 7.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August September October November December 24,000 units 22,700 units 24,100 units 25, 300 units 25,000 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 12,200 kilograms of Jurislon were on hand. The cost of Jurislon is $21 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months. The total cost of Jurislon to be purchased in August is: Multiple Choice $1,747,200 $4,238,850 0 3.780000 $3,780,000 The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 6,600 direct labor-hours will be required in May. The variable overhead rate is $7.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $138,600 per month, which includes depreciation of $24,910. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be: Multiple Choice $7.10 0 $24.60 $24.60 0 $21.00 0 $28.10