The June Company produces two products, A and B. The company predicts a sales volume for 20X8 of 10,000 units for product A with a required closing finished goods inventory of 2,000 units. For product B the company predicts a sales volume of 12,000 units and a required closing finished goods inventory of 3,000 units. At present the opening finished goods inventory for product A is 7,000 units while the inventory for product B contains 9,000 units.

To produce these products the following raw materials are required:

Cost per kg X $2.00

Y 2.50 Z 1.25

A B 2kg 1kg 1kg

3 kg

In addition to the materials, product A requires three hours of cutting and two hours of finishing. Product B requires one hour of cutting and three hours of finishing. The direct labor rate for cutting is $5.00 per hour and $10.00 per hour for finishing.

Required

1. Prepare a production budget in units.

2. Prepare a direct materials budget for product B only.

3. Prepare a direct labor budget for product A only.