Coles Corporation, Incorporated Makes and Sells a Single Product, Product

Multiple Choice

Coles Corporation, Incorporated makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year.The desired ending inventory of Material K for September is:

A) 7,560 yards
B) 8,400 yards
C) 8,700 yards
D) 9,300 yards