# 56

A company forecasted sales of 20,000 units for the month of August.

The following information was available from other budgets:

Sales budget: Average selling price of $20 per unit

Direct materials budget: 2 pounds per unit at a price of $3 per pound

Direct labor budget: 1/2 hours per unit at a price of $12 per hour

Overhead budget: $4 per direct labor hour ($3 of variable and $1 of fixed)

SG&A budget: $2 per unit plus $10,000

What is the forecasted gross margin for August?

$70,000

$80,000

$120,000

$130,000