The correct answer for this problem is $47,040

Question 5: AJ Company produces 30,000 baskets per year. The company estimates costs per unit below: $20 Direct material costs Conversion costs $18 $10 Direct labor Support Annual inventory carrying costs are not included in the above costs. The annual estimate is 12%. AJ's average inventory levels are estimated as follows Direct material WIP (80% complete for materials & 30% for conversion) Finished goods 3 months of production 2 months of production 1 month of production Compute the annual inventory carrying costs for AJ Company