Question

Nevis Motors manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $430 per ounce; the company maintains an ending platinum inventory equal to 10% of the following month's production usage. The following data were taken from the most recent quarterly production budget: July August September Planned production in units 3,000 3,100 2,980 The cost of platinum to be purchased to support August production is: Multiple Choice $663,920. $666,500. $669,080.

Answer 1

the cost of the platinum to be purchased on august is $663,920

Step-by-step explanation:

The computation of the cost of the platinum to be purchased on august is shown below:

= (August production - july - september) × required ounces × cost per ounce

= (3,100 - 310 + 298) × 0.5 × $430

= $663,920

hence, the cost of the platinum to be purchased on august is $663,920