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Piper Pasta produces pasta. Piper has a policy that its ending inventory of pasta should be 2 0 % of the next month's expected demand.

Piper Pasta produces pasta. Piper has a policy that its ending inventory of pasta should be 20% of the next month's
expected demand. At March 31, Piper has 120 batches of prepared pasta in finished goods inventory. The pasta that
piper produces uses a special organic flour which costs $2.40 per kilogram. The demand schedule for the next four
months is as follows:
Prepare a production budget for April and May. Also show the total for the two months.
Assume that the company estimated its DM needs in May and June to be 3,830 and 3,750kgs of flour,
respectively The company usually pays 20% of any DM purchases in the month of purchase and the
remainder in the following month after purchase. How much would the company show in DM purchases on
its cash budget in June?
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