Question 1

Below is the information of General Inc. for Product X for the year ended December 31, 2019:

Sales	640,000 units
Desired ending inventory	85,000 units
Estimated beginning inventory, Jan. 1	90,000 units

In General Inc.'s production operations, Materials A, B, and C are required to make Product X. The quantities of direct materials expected to be used for each unit of product are as follows:

Product X
Material A	0.50 pound per unit
Material B	1.00 pound per unit
Material C	1.20 pound per unit
The prices of direct materials are as follows:
Material A	$0.60 per pound
Material B	$1.70 per pound
Material C	$1.00 per pound

REQUIRED:

(a)	Prepare a production budget for Product X for General Inc. for the year ended December 31, 2019. (show workings)	(6 marks)
(b)	Prepare a direct materials purchases budget for Product X for General Inc. for the year ended December 31, 2019, assuming that there are no beginning or ending inventories for direct materials (all units purchased are used in production). (show workings)	(22 marks)

Question 2

Illustrate Standard Costing and explain the purpose of all the elements included in Standard Costing for the management of production cost.