At 50,000 units of production, the Grayson Company expects costs to be as follows:

	Direct materials	$140,000
	Direct labour	$100,000
	Depreciation of factory	$ 50,000
	Depreciation of production equipment	$ 40,000
	Production supervisors salary	$ 24,000
	Supplies	$ 5,000
	Indirect labour	$ 30,000
	Electricity	$ 15,000

Assume all cost items are either strictly fixed or strictly variable.

The total cost of direct materials at 40,000 units of production would be:

Select one:

a.

$116,000

b.

$168,000

c.

$112,000

d.

$140,000

At 50,000 units of production, the Grayson Company expects costs to be as follows: Direct materials $140,000 Direct labour $100,000 Depreciation of factory $ 50,000 Depreciation of production equipment $ 40,000 Production supervisor's salary $ 24,000 Supplies $ 5,000 Indirect labour $ 30,000 Electricity $ 15,000 Assume all cost items are either strictly fixed or strictly variable. The total cost of direct materials at 40,000 units of production would be: Select one: a. $116,000 b. $168,000 c. $112,000 d. $140,000