1.

Prestwich Company has budgeted production for next year as follows:

First quarter Second quarter Third quarter Fourth quarter

Production in units. 60,000 80,000 90,000 70,000

Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for material A. A total of 30,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the third quarter would be:

A. 170,000 pounds

B. 205,000 pounds

C. 165,000 pounds

D. 85,000 pounds

2.

A partial listing of costs incurred during December at Gagnier Corporation appears below:

Factory supplies......................................... $8,000

Administrative wages and salaries............ $105,000

Direct Materials....................................... $153,000

Sales staff salaries................................... $68,000

Factory depreciation............................... $49,000

Corporate headquarters building rent..... $34,000

Indirect labor.......................................... $32,000

Marketing............................................... $103,000

Direct labor............................................ $83,000

The total of the manufacturing overhead costs listed above for December is: