Caspion Corporation Makes and Sells a Product Called a Miniwarp

Multiple Choice

Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5 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 20% of the following month's production needs. On July 31, this requirement was not met since only 12,600 kilograms of Jurislon were on hand. The cost of Jurislon is $25 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months.The total cost of Jurislon to be purchased in August is:

A) $2,757,500
B) $1,498,750
C) $1,813,750
D) $1,525,000