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Orr Company makes and sells a single product. A sales budget for the next four months appears below: Budgeted Units to be Sold February 15,000
Orr Company makes and sells a single product. A sales budget for the next four months appears below: Budgeted Units to be Sold February 15,000 units March 18,000 units April 16,000 units May 20,000 units It is Orr Company's policy to have finished goods inventory on hand at the end of each month equal to 80% of the next month's sales. Additionally, it is known that each unit produced requires four pounds of direct materials. The company's policy is to have direct materials inventory on hand at the end of each month equal to 120% of the next month's production needs. The cost of direct materials is $1.75 per pound. Calculate the total cost of direct materials budgeted to be purchased in March
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