Answer:
Budgeted material cost for January is $ 256,000
Explanation:
Computations
<u>Raw materials requirement for January</u>
Units to be produced in January 24,000 units
Raw material requirement for January at 4 pounds per unit 96,000 pounds
<u>Raw materials requirement for February</u>
Units to be produced in February 28,000 units
Raw material requirement for February at 4 pounds per unit 112,000 pounds
40 % of requirement of February to be available end January <u>44,800 pounds</u>
<u>Purchases for January</u>
Closing Inventory+ Consumption -Opening Inventory
44,800 pounds + 96,000 pounds - 38,400 pounds = 102,400 pounds
Cost per pound $ 2,50 per pound = $ 256,000
