1 of 1 Blended Learning Question (Topic: Functional Budgets) - BLQI Set 2 Mummy's Bakery sells two types of fruit cake called, Brownie (BROW) and Delight (DELI). The expected sales for the next financial year (2022) for both the cakes BROW and DELI will be will be 3,900 cakes and 5,200 cakes respectively. The current selling price per cake for BROW and DELI is $350 and $450 respectively. The company expects to increase all selling prices in the next year by 20% to cope with rising cost of baking and packing. The company will have an opening inventory of 100 and 170 cakes of BROW and DELI respectively at the start of the year 2022. The company wants to maintain an ending inventory level at the end of year 2022, equivalent to two (2) weeks of sales for each of the products. (A year has 52 weeks) However, there were some spoilt cakes in the opening inventory of BROW by 30 cakes and DELI by 40 cakes, which was not accounted yet in the company's inventory records. The company also anticipates stock losses at year-end due to mishandling and pilferages of 20 units for BROW and 30 units for DELI Additional information is given below about the raw materials required to produce both cakes. Other related production and non-production costs are also given below. Per cake of finished good: Direct material - S (in kg) Direct material-T (in kg) Direct labour (minutes) BROW DELI 2.0 1.5 0.8 1.2 84 90 Direct Materials: S T Desired closing inventory (in kg) 3,000 2,000 Opening inventory (in kg) 1,950 1,560 Standard rates and prices: Direct labour rate (hourly) Direct material price - S Direct material price - T Production overheads - Variable - Fixed Non-production overheads - Variable - Fixed $40.00 per hour $20.00 per kg $40.00 per kg $10.00 per direct labour hour $24.00 per direct labour hour $230,300 $109,000 Required: Prepare the following operational budgets: a) Sales Budget (4 marks) b) Production Budget (no decimal point) (6 marks) c) Raw Material Usage and Purchase Budget (7 marks) d) Direct Labour Budget (4 marks) e) Total Overheads Budgets (4 marks) (Total: 25 marks)