Question

Here is another one: BDH Corporation, which makes only one product, Kisty, has the following information available for the coming year. BDH expects sales to be 30,000 units at $50 per unit. The current inventory of Kisty is 3,000 units. BDH wants an ending inventory of 3,500 units. Each unit of Kisty takes two units of component L. Component L is estimated to cost $12 per unit. Current inventory of L is 4,000 units. BDH wants 6,000 units of L on hand at the end of the next year. What is the budgeted ending inventory cost for direct materials for the next year?

Answer 1

72,000.