Jinsung Industries is preparing its master budget for 2020. Relevant data pertaining to its sales, production, and direct materials budgets are as follows:

Sales: Sales for the year are expected to total 1,200,000 units. Quarterly sales are 20%, 25%, 30%, and 25% respectively. The sales price is expected to be HK$500 per unit for the first three quarters and HK$550 per unit beginning in the fourth quarter. Sales in the first quarter of 2021 are expected to be 10% higher than the budgeted sales for the first quarter of 2020.

Production: Management desires to maintain ending finished goods inventories at 25% of next quarters budgeted sales volume.

Direct materials: Each unit requires 3 kilograms, of raw materials at a cost of HK$50 per kilogram, Management desires to maintain raw materials inventories at 5% of the next quarters production requirements. Assume the production requirements for the first quarter of 2021 are 810,000 kilograms.

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