Reference no: EM132715612

Below are forecast sales and inventory information for Silver, Inc., :

Unit selling price $20 per unit

Sales 45,000 units

Beginning Finished Goods inventory 10,000 units

Desired ending Finished Goods inventory 9,000 units

• The standard labor time to produce one unit is 0.5 hrs. and standard labor rate is $6 per hour. Silver allocate overhead using predetermined overhead rate at $2/labor hour.

Problem 1: Each completed unit requires 5 kilos of material which costs $2.00 per kilo. The beginning inventory of raw materials is 13,000 kilos. The company wants to have 3,000 kilos of material in inventory at the end of the year. The budgeted purchase cost of direct materials would be _____________

A. $420,000

B. $404,000

C. $396,000

D. $280,000