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Orr Company makes and sells a single product. It takes four yards of direct materials to produce one unit of this product. Budgeted units to
Orr Company makes and sells a single product. It takes four yards of direct materials to produce one unit of this product. Budgeted units to be produced for the next three months is as follows: Budgeted Units to be Produced February 37,500 units March 41,200 units April 23,900 units The company wants to maintain monthly ending inventories of direct materials equal to 15% of the following month's production needs. The cost of direct materials is $1.20 per yard. The company is in the process of preparing a direct materials purchases budget. Calculate the total cost of direct materials to be purchased in March.
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