Illustrative Problem Selected information concerning sales and production for Cabot Co.for July 2010 are summarized as follows a. Estimated sales Product K 40,000 units at $30.00 per unit Product L: 20,000 units at $65.00 per unit b. Estimated inventories, July 1,2010 Material A: Material B: 3,500 lbs. Product L 2,700 units at $35 per unit4.502 4,000 lbs. Product K: 3,000 units at$17 per unit 51,000 Total There were no work in process inventories estimated for July 1,2010. Desired inventories at July 31, 2010: e. Material A: 3,000 lbs. Product K: 2,500 units at $17 per unit $ 42,500 70,000 12.509 Material B: 2,500 lbs. Product L: Total 2,000 units at $35 per unit There were no work in process inventories desired for July 31, 201o. d. Direct materials used in production: Product K Product L Material A Material B 0.7 tb. per unit 1.2 lbs. per unit 3.5 lbs. per unit 18 lbs. por unit e. Unit costs for direct materials Material A: $4.00 per lb. Material B $2.00 per lb. f. Direct labor requirements: Department 1 Product K Product L 04 hr. per unit 0.6 hr. por unit 0.15 hr. per unit 0.25 hr. per unit g. Direct labor rate $12.00 per hr $16.00 per hr h. Estimated factory overhead costs for July: Indirect factory wages Depreciation of plant and equipment Power and light Indirect materiats Total $200,000 40,000 25,000 34.000 1. Prepare a sales budget for July 2. Prepare a production budget for July. 3. Prepare a direct materials purchases budget for july 4 Prepare a direct labor cost budget for luly 5. Prepare a cost of goods sold budget for July