Northwest manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $360 per ounce; the company maintains an ending platinum inventory equal to 10% of the following month's production usage. The following data were taken from the most recent quarterly production budget:

	July	August	September
Planned production in units	1,000	1,100	980

33. The cost of platinum to be purchased to support August production is:

A. $195,840.

B. $198,000.

C. $200,160.

D. $391,680.

E. Some other amount.

Answer: A

34. If it takes two direct labor hours to produce each unit and Northwest's cost per labor hour is $15, direct labor cost for August would be budgeted at:

A. $16,500.

B. $31,200.

C. $33,000.

D. $34,800.

E. Some other amount.

Answer: C

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