As a management accountant, you are asked to look at the following budgeted data. Materials cost 2.50 per kg and 10kg per unit. Labour is paid 9 per hour with 5 hours per unit. The overhead absorption rate (OAR) is 10 per labour hour with a total production overheads of 200,000.

If the production cost is 120 per unit how many units are budgeted to be produced?

1. 2,000 units

2. 1,666.67 units

3. 20,000 units

4. 4,000 units