This Question: 3 pts 23 of 49 (0 complete)This Test: 150 pts Beridze Manufacturi

Question

This Question: 3 pts 23 of 49 (0 complete)This Test: 150 pts Beridze Manufacturing expects to produce 2,700 units in January and 3,300 units in February. Beridze budgets $20.00 per unit for direct materials. The amount of indirect materials needed for production has been determined to be insignificant and will therefore not be considered in the calculation. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is $37,250.00. Beridze desires the ending balance in Raw Materials Inventory to be 10% of the next month's direct materials needed for production. Desired ending balance for February is $50,200.00. What is the cost of budgeted purchases of direct materials needed for January? OA. $54,000.00 B. $22,150.00 OC. $60,600.00 O D. $23,350.00

Explanation / Answer

Jan Production (Units) 2700 Unit Price 20 Cost of Raw Material 54000 Ending Inventory(3300*10%) 330 Cost of Ending Inventory 6600 Opening Inventory 37250 Cost of Budgeted purchases of direct materials 23350 Production + Closing - Opening Therefore the cost of Budgeted purchases of direct materials needed for January is $ 23350 The correct Option is D

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