Pasadena candle inc. budgeted production of 785,000 candles for january. wax is required to produce a candle. assume 10 ounces of wax is required for each candle. the estimated january 1 wax inventory is 16,000 pounds. the desired january 31 wax inventory is 12,500 pounds. if candle wax costs $1.24 per pound, determine the direct materials purchases budget for january. (one pound = 16 ounces.) for those boxes in which you must enter subtracted or negative numbers use a minus sign.

Steele bicycle manufacturing company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. steele produces and sells only 10,000 bikes each year. due to the low volume of activity, steele is unable to obtain the economies of scale that larger producers achieve. for example, steele could buy the handlebars for $31 each: they cost $34 each to make. the following is a detailed breakdown of current production costs: after seeing these figures, steele's president remarked that it would be foolish for the company to continue to produce the handlebars at $34 each when it can buy them for $31 each. calculate the total relevant cost. do you agree with the president's conclusion?