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Perine Company 2000

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Perine Company has 2,000 pounds of raw materials in its December 31, 2013, ending
inventory. Required production for January and February of 2014 are 4,000 and 5,000
units, respectively. Two pounds of raw materials are needed for each unit, and the estimated
cost per pound is $6. Management desires an ending inventory equal to 25% of next
month’s materials requirements. Prepare the direct materials budget for January.

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