Use the following information to answer questions 4–5. Dagwood Company plans to produce 50,000 units during March and another 60,000 units during April. It takes 2 hours to make a unit and labor is paid $14 per hour. In addition, a unit requires 3 pounds of raw materials, which cost $5 per pound. There are 15,000 pounds of raw materials on hand on March 1. Dagwood desires an ending inventory that is equal to 10 percent of the next month’s raw material needs. 14. What is the estimated labor cost for March?
a. $100,000
b. $700,000
c. $1,400,000
d. $3,080,000
15. How many pounds of raw materials should Dagwood purchase in March?
a. 135,000
b. 150,000
c. 153,000
d. 168,000