The chief financial officer for Cast in Stone concrete products had previously established a line of credit with a local bank that enables Cast in Stone to borrow 85% of the company's inventory balance. The company currently has 1,200 units in stock, and is performing "on budget."

The budget anticipated that direct labor cost would be $18 per hour, and factory overhead is applied to production based on $8.00 per direct labor hour.

Each unit requires 3 labor hours and 900 pounds of direct material. The direct material costs $0.20 per pound.

Determine the amount of credit available under the borrowing agreement.

A.

Total available under line of credit

265,000.00

B.

Total available under line of credit

262,310.00

C.

Total available under line of credit

263,160.00

D.

Total available under line of credit

26,360.00

E.

Total available under line of credit

261650.00