Norton Manufacturing expects to produce 2,400 units in January and 3,300 units i

Question

Norton Manufacturing expects to produce 2,400 units in January and 3,300 units in February. Norton budgets $45 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 $38,350. Norton desires the ending balance in Raw Materials Inventory to be 70% 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. $211,950

B. $173,600

C. $108,000

D. $145,250

Explanation / Answer

$ 108,000

Cost of budgeted purchases of direct materials needed for production

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