=+Inventory is valued at the standard variable cost of production, and at the end of December will amount to 2000 units of product A and 1000 units of product B. The company has decided that it would be wise to maintain month-end stocks at a half of the following month's expected sales for product A and the whole of the following month's expected sales for product B.

All goods are sold on credit. For product A, 50% of debts are collected in the month following sale and 48% in the subsequent month. The remaining 2% prove to be not collectable. For product B, the corresponding figures are 20% after one month, 75%

after two months and 5% uncollectable. All costs are paid in cash during the month in which they are incurred, except for raw materials, which are paid for one month in advance of their use in production, owing to the need to maintain ade qua te raw material stocks.

Required: