5) Presented is selected second quarter budget data for the Arnold Company

	Sales
April	20,000 units
May	30,000 units
June	36,000 units

Additional information:

- Each unit of finished product requires three pounds of raw materials.

- Arnold maintains ending finishing goods inventories equal to 20% of the following month's budgeted sales.

- Arnold maintains raw materials inventories equal to 25% of the following month's budgeted production.

- April 1 inventories are in line with Arnold's inventory policy.

Arnold's budgeted purchases (in pounds) for April is:

a) 66,000 pounds

b) 72,900 pounds

c) 89,400 pounds

d) None of the above

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6) Presented is additional information for the Arnold Company (refer to the information above):

- Price per pound of raw materials: $20

- Direct labor per unit of finished product: 0.40 hours at $25 per hour

- Total monthly factory overhead: $200,000 + $10 per direct labor hour

Arnold's total manufacturing cost budget for April is:

a) $880,000

b) $1,680,000

c) $1,828,000

d) $1,966,000