Question 21

Presented is selected first quarter budget data for the Barney Company:

Sales

January 25,000 units

February 20,000 units

March 42,000 units

Additional information:

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

-Barney maintains ending finished goods inventories equal to 25 percent of the following month's budgeted sales.

-Barney maintains raw materials inventories equal to 20 percent of the following month's budgeted production.

-January 1 inventories are in line with Barney's inventory policy.

Presented is additional information for the Barney Company:

Price per pound of raw materials $25

Direct labor per unit of finished product 0.50 hours at $20 per hour

Total monthly factory overhead $150,000 + $10 per direct labor hour Barney's total manufacturing cost budget for January is:

Select one:

A. $1,575,000

B. $1,693,750

C. $1,425,000

D. $1,717,500