The management accountant at Wynton Ltd has been asked to prepare the company's annual budgets for the coming year.The company manufactures and sells two products (AB1 and XY2) and the following preliminary information has been collected:

ProductProduct

AB1XY2

Sales budget:

Anticipated volume in units450,000200,000

Unit selling price$20$25

Production budget:

Desired ending finished goods units25,00015,000

Beginning finished goods units30,00010,000

Direct materials budget:

Direct materials per unit2 kg3 kg

Desired ending direct materials 30,000 kg15,000 kg

Beginning direct materials40,000 kg 10,000 kg

Cost per kg$3$4

Direct labour budget:

Direct labour time per unit0.4 hours0.6 hours

Direct labour rate per hour$10$10

Total unit cost$12$20

Budgeted income statement:

An assistant has prepared the selling and administrative expense budget, which reveals:

ProductProduct

AB1XY2

Selling expenses$660,000$360,000

Administrative expenses$540,000$340,000

Income taxes are expected to be 30 per cent of company net profit (net income).

Required

Prepare the following budgets for the coming year:

(a)Sales(Marks 3)

(b)Production (Marks 3)

(c)Direct materials (Marks 3)

(d)Direct labour(Marks 3)

(e)Income statement (Marks 3)