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evis Motors manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $360 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: JulyAugustSeptember Planned production in units1,0001,100980 The cost of platinum to be purchased to support August production is: Multiple Choice $195,840. $198,000. None of the answers is correct. $391,680. $200,160.

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Answer:

$195,840

Explanation:

Calculation for what The cost of platinum to be purchased to support August production is:

Cost of platinum to be purchased=(1100*0.5)-[(1100*10%*0.5)-(980*10%*0.5)]×$360

Cost of platinum to be purchased =550 - (55 - 49) ×$360

Cost of platinum to be purchased= 544oz x $360

Cost of platinum to be purchased= $195,840

Therefore The cost of platinum to be purchased to support August production is:$195,840

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