Problem 6 Amount Under Line of Credit The chief financial officer for Backyard Playground products had previously established a line of credit with a local bank that enables Backyard to borrow 65% of the company's inventory balance. The company currently has 2,200 units in stock, and is performing "on budget." The budget anticipated that direct labor cost would be $17.50 per hour, and factory overhead is applied to production based on $8.30 per direct labor hour. Each unit requires 4.75 labor hours and 725 pounds of direct material. The direct material costs $0.17 per pound. Determine the amount of credit available under the borrowing agreement. WORKSHEET 6 Amount available under line of credit: Units Per Unit Cost Per Unit Total Direct material Direct labor Applied factory overhead X Units in finished goods inventory Finished goods inventory X Portion available for line of credit Total available under line of credit