2. A company is preparing its budget for the forthcoming period.

The following information is available

1. Budgeted sales are 2,000 units per month, budgeted production is 2,050 units per month.
2. Finished goods inventory at the start of the year will be 1,000 units.
3. There are no direct materials or work-in-progress in inventories.
4. All sales are on credit, 20% are paid in the month of sale and the remainders are paid in the
month after that. No irrecoverable debts are expected.
5. The standard cost card of the company’s only product are as follows:
$ per unit

Selling price 12

Direct materials 4

Direct labor 2

Fixed production overhead 1

Gross profit 5

Selling overhead 3

Operating profit 2

6. The standard direct material cost is $80 per kg.

7. The standard direct labor rate is $20 per hour.

Task 1:

Direct material purchase for the year kg

Direct labor hours for the year hours
Account receivable at the end of the year $.............
The value of the fini8shed inventory at the end of the year. (using absorption costing) $.............