Alliance Company's Budgets Production of 24,000 Units in January and 28,000

Multiple Choice

Alliance Company's budgets production of 24,000 units in January and 28,000 units in the February. Each finished unit requires 4 pounds of raw material K that costs $2.50 per pound. Each month's ending raw materials inventory should equal 40% of the following month's budgeted materials. The January 1 inventory for this material is 38,400 pounds. What is the budgeted materials cost for January?

A) $240,000.
B) $352,000.
C) $256,000.
D) $144,000.
E) $208,000.