Question - Orr Company makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next three months is as follows:
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Budgeted Biks to be Produced
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February
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15,000 units
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March
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18,500 units
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April
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17,200 units
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The company wants to maintain monthly ending inventories of Material A equal to 25% of the next month's production needs. The cost of material A is $1.20 per yard. The company is in the process of preparing a direct materials purchases budget.
Calculate the total cost of material A budgeted to be purchased in March. Do not use decimals in your answer.