A. The Sirap Co. projected sales of 75000 pens for the year. The estimated Jan 1. Inventory is at 3500 units. The desired Dec. 31 Inventory is at 2700 units. Calculate the budgeted production of pens for the year.

The Sirap. Co. budgeted production of 74200 pens during the year. Assume that 8 ounces of ink is required to produce each pen. The January 1 Inventory is at 2500 pounds of ink. The desired Dec 31 Inventory is at 2100 pounds of ink. If ink cost $4.10 per pound, determine the direct materials purchases cost for the year. (Hint, first calculate the number of pounds of ink required for production. Note the 3 inventory levels. Then multiply by $4.10 per pound.)