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ABC Ltd. is planning on producing 12,000 units in March, and 14,400 in April. Each product requires a 0.5kg of material X, which costs $2.20 per kg. The company's policy is to have enough material on hand to equal 10% of the next month's production needs. What is the budgeted cost of purchases for March?

ABC Ltd. is planning on producing 12,000 units in March, and 14,400 in April. Each product requires a 0.5kg of material X, which costs $2.20 per kg. The company's policy is to have enough material on hand to equal 10% of the next month's production needs. What is the budgeted cost of purchases for March?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Ltd. is planning on producing 12,000 units in March, and 14,400 in April. Each product requires a 0.5kg of material X, which costs $2.20 per kg. The company's policy is to have enough material on hand to equal 10% of the next month's production needs. What is the budgeted cost of purchases for March?
Transcribed Image Text:ABC Ltd. is planning on producing 12,000 units in March, and 14,400 in April. Each product requires a 0.5kg of material X, which costs $2.20 per kg. The company's policy is to have enough material on hand to equal 10% of the next month's production needs. What is the budgeted cost of purchases for March?
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