TB MC Qu. 8-176 Caspion Corporation makes and sells ...

Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 4.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows:

August	24,600	units
September	23,300	units
October	24,700	units
November	25,900	units
December	25,600	units

The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 12,800 kilograms of Jurislon were on hand. The cost of Jurislon is $27 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.

The total cost of Jurislon to be purchased in August is:

Multiple Choice

• $2,722,680

• $3,209,490

• $3,555,090

• $2,988,900