The sales department of Optimo Company has forecast sales for May 2011 to be 40,000 units. Additional information follows:

Finished goods inventory, May 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 units

Finished goods inventory, May 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Materials used in production:

Direct labor hours required in production:

Prepare the following:
a. A production budget for May.
b. A direct materials budget for May.
c. A direct labor budget forMay.

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Required Required Inventory Inventory Standard May 1 ...1,000 gal Y (one pound per unit) 2,000 Ib May 31 Cost X (one gallon per unit).. 2,000 ga $4 per gal 2,000 lb $ 2 perlb Hours per Standard Department Forming Finishing Unit 0.50 1.00 Cost $18 per hour $15 per hour