Question: my question is related to sales production and purchases budgets...

My question is related to sales, production and purchases budgets; activity-based overhead: manufacturer.

 

George Ltd manufactures and sells two different types of coils used in electric motors. In September, Jessica, the management accountant, compiled the following data for the upcoming annual budget.

Use of direct material:

	Amount used per unit
Direct material	Light coil	Heavy coil
Sheet metal	4 kg	5 kg
Copper wire	2 kg	3 kg
Platform		1 unit

Raw material prices and inventory levels:

	Anticipated purchase price $	Expected inventories 1 Jan	Desired inventories 31 Dec
Raw material	$8	32 000 kg	36 000 kg
Copper wire	$5	29 000 kg	32 000 kg
Platform	$3	6 000 units	7 000 units

 

Direct labour requirements and rates:

 

Product	Hours per unit	Rate per hour
Light coil	2	$30
Heavy coil	3	$40

 

Manufacturing overhead

Activity	Cost per unit of activity driver
Material handling:
Sheet metal and copper wire	$0.50 per kg of raw material purchased
Platforms	$0.10 per unit purchased
Machine related	$1.50 per machine hour*
Shipping	$2.00 per coil shipped
General manufacturing overhead	$1.20 per direct labour hour

*Total annual machine hours are 100 000 for light coils and 200 000 for heavy coils.

 

 Finished goods inventories (in units):

Product	Expected 1 Jan	Desired 31 Dec
Light coil	20 000	25 000
Heavy coil	8 000	9 000

 

Sales forecast:

Product	Units	Price $
Light coil	60 000	$130
Heavy coil	40 000	$190

 

Prepare the following budgets:

 

1. Sales budget (in dollars $)

2. Production budget (in units)

3. Direct material purchases budget (in quantities)

4. Direct material purchases budget (in dollars $)

5. Direct labour budget (in dollars $)

6. Manufacturing overhead budget (in dollars $)

Thanks!

Nadia