Norton Manufacturing expects to produce 2,100 units in January and 3,900 units i

Question

Norton Manufacturing expects to produce 2,100 units in January and 3,900 units in February. Norton Budgets $30 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 $37,650. Norton desires the ending balance in Raw Materials Inventory to be 50% of the next month's direct materials needed for procedures. Desired ending balance for February is $50,600. What is the cost of budgeted purchases of direct materials needed for January?

A. $63,000

B. $121,500

C. $83,850

D. $56,850

Explanation / Answer

The cost of budgeted purchases of direct materials needed for January is $ 63000

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