Answer:
Cost of purchase= $1,014,300
Explanation:
Giving the following formula:
Production:
August= 22,600
September= 21,300
Ending inventory= 20% of the following month's production needs.
Beginning inventory= 10,800 kg
The cost of Jurislon is $18.00 per kilogram.
One Miniwarp requires 2.5 kilograms of the raw material Jurislon.
<u>First, we need to calculate the purchases in kg required using the following formula:</u>
Purchases= production + desired ending inventory - beginning inventory
Purchases= (2.5*22,600) + (2.5*21,300)*0.2 - 10,800
Purchases= 56,350kg
<u>Now, the total cost of purchase:</u>
Cost of purchase= 56,350*18= $1,014,300
