. The material costs $.56 per pound. Adob SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR MATERIAL 60% of a month's purchases are paid for in the month of purchase; 40% is paid for in the following month. No discounts are given for early payment. The accounts payable balance on December 31 was $0. DIRECT LABOR BUDGET . . Each unit produced requires .74 hours of direct labor. Each hour of direct labor costs the company $14.00. Management fully adjusts the workforce to the workload each month. MANUFACTURING OVERHEAD BUDGET Variable manufacturing overhead is $3.20 per direct labor-hour. Fixed manufacturing overhead is $91,000 per month. This includes $15,000 in depreciation, which is not a cash outflow. ENDING FINISHED GOODS INVENTORY BUDGET Okay, a new startup business, uses absorption costing in its budgeted income statement and balance sheet. Manufacturing overhead is applied to units of product on the basis of direct labor- hours. The company has no work in process inventories. SELLING AND ADMINISTRATIVE EXPENSE BUDGET