Question
PLEASE PROVIDE FORMULA! Norton Manufacturing expects to produce 2,700 units in January and 3,500 units in February. Norton budgets $50 per unit for direct materials.
PLEASE PROVIDE FORMULA!
Norton Manufacturing expects to produce 2,700 units in January and 3,500 units in February. Norton budgets $50 per unit for direct materials. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is $39,050. Norton desires the ending balance in Raw Materials Inventory to be 1010% of the next month's direct materials needed for production. Desired ending balance for February is $52,000. What is the cost of budgeted purchases of direct materials needed for January?
A. $152,500
B. $113,450
C. $109,450
D. $135,000
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