Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August.The direct materials requirement per unit is 2 ounces (oz.).The company requires to have safety stock of direct materials on hand at the end of each month to complete 20% of the units of budgeted production in the following month.There was 3,160 ounces of direct material in inventory at the start of July.The total ounces of direct materials to be purchased in July is:
A)15,800 oz.
B)16,200 oz.
C)19,040 oz.
D)15,880 oz.
E)15,720 oz.

Question

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The Answer of Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August.The direct materials requirement per unit is 2 ounces (oz.).The company requires to have safety stock of direct materials on hand at the end of each month to complete 20% of the units of budgeted production in the following month.There was 3,160 ounces of direct material in inventory at the start of July.The total ounces of direct materials to be purchased in July is:
A)15,800 oz.
B)16,200 oz.
C)19,040 oz.
D)15,880 oz.
E)15,720 oz.

Flagstaff Company Has Budgeted Production Units of 7,900 for July