Hargrow, Inc

Multiple Choice

Hargrow, Inc.makes and sells a single product, buckets.It takes 30 ounces of plastic to make one bucket.Budgeted production of buckets for the next three months is as follows: August 90,000 units, September 75,000 units, October 65,000 units.The company wants to maintain monthly ending inventories of plastic equal to 10% of the following month's production needs.On August 31, 195,000 ounces of plastic were on hand.The cost of plastic is $0.03 per ounce.How much is the ending inventory of plastic to be reported on the company's balance sheet at September 30?

A) $195,000
B) $5,850
C) $6,750
D) $7,500