Jackson Company makes and sells a single product. It takes
five pounds of direct materials to produce one unit of
this product. Budgeted units to be produced for the next
four months is as follows:
budgeted units to be produced
June 48,100 July 29,300
August 76,200
September 50,400
The company wants to maintain monthly ending inventories
of direct materials equal to 160% of the next month's
production needs. The cost of direct materials is $1.50
per pound. The company is in the process of preparing a
direct materials purchases budget.
Calculate the cost of direct materials budgeted to be
purchased in June.