Orr Company makes and sells a single product called a Bik. It takes three yards of Material
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Question:
Orr Company makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next three months is as follows:
Budgted Biks to be Produced February 15,000 units March 18,500 units April 17,200 units
The company wants to maintain monthly ending inventories of Material A equal to 25% of the next month's production needs. The cost of material A is $1.20 per yard. The company is in the process of preparing a direct materials purchases budget.
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