Sellars Inc

Multiple Choice

Sellars Inc. manufactures widgets. On June 30, the company had 2,000 widgets in inventory. The company's policy is to maintain a widget ending inventory equal to 10% of next month's sales. In addition, each widget manufactured requires 6 minutes of assembly and inspecting time at a cost of $.25 per minute. The company expects the following sales activity for the third quarter of the year:
What is the projected direct labor cost for August?

A) $55,800
B) $57,000
C) $61,500
D) $58,200