Woodsman Inc. produces a variety of wood finishing products including gallons of varnish that it manufactures and packages under its own name. The company has computed the required production of gallons of varnish it will need for the first three months of 2013 as follows: Each gallon of varnish requires 10 ounces of a special chemical. This chemical costs $.25 per ounce. The company has determined that it needs 20 percent of next month's raw material needs on hand at the end of each month.
The cost of the direct material that should be purchased in February is:

Question

Woodsman Inc. produces a variety of wood finishing products including gallons of varnish that it manufactures and packages under its own name. The company has computed the required production of gallons of varnish it will need for the first three months of 2013 as follows:  Each gallon of varnish requires 10 ounces of a special chemical. This chemical costs $.25 per ounce. The company has determined that it needs 20 percent of next month's raw material needs on hand at the end of each month.
The cost of the direct material that should be purchased in February is:

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The Answer of Woodsman Inc. produces a variety of wood finishing products including gallons of varnish that it manufactures and packages under its own name. The company has computed the required production of gallons of varnish it will need for the first three months of 2013 as follows:  Each gallon of varnish requires 10 ounces of a special chemical. This chemical costs $.25 per ounce. The company has determined that it needs 20 percent of next month's raw material needs on hand at the end of each month.
The cost of the direct material that should be purchased in February is: