Tanaka Group is planning to produce 2,000 units of product in 2020. Each unit requires 3 kilograms of materials at ¥500 per kilogram and a half-hour of labor at ¥1600 per hour. The overhead rate is 70% of direct labor.

Instructions
a. Compute the budgeted amounts for 2020 for direct materials to be used, direct labor, and applied overhead.

b. Compute the standard cost of one unit of product.

c. What are the potential advantages to a company of using standard costs?