Casper Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 3.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: The company wants to maintain monthly ending inventories of Jurislon equal to 10% of the following month's production needs. On July 31, this requirement was not met since only 6,900 kilograms of Jurislon were on hand. The cost of Jurislon is $3.00 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.
-The desired ending inventory of Jurislon for the month of September is:

Question

Casper Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 3.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: The company wants to maintain monthly ending inventories of Jurislon equal to 10% of the following month's production needs. On July 31, this requirement was not met since only 6,900 kilograms of Jurislon were on hand. The cost of Jurislon is $3.00 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months. 
-The desired ending inventory of Jurislon for the month of September is:

Quizplus · Accepted Answer

Ending inventory of Jurislon for September = 10% of October's production needs = 10% F1F1F1S1F1F1F10 20,300 units F1F1F1S1F1F1F10 3.5 kilograms per unit = 7,105 kilograms
Cost of ending inventory of Jurilson = 7,105 kilograms F1F1F1S1F1F1F10 $3.00 per kilogram = $21,315

Casper Corporation Makes and Sells a Product Called a Miniwarp