3. OPERATING BUDGET The following is the data for compiling the operating budget for February & March 2020 at PTALINDYA a) During January it can sell 60,000 units of the product and is expected to increase by 10% every month. The selling price is IDR 9,000 per unit b) Inventories of finished products as of January 31 were 14,000 units. The final finished product inventory is expected to be 25% of last month's unit sales. c) To produce per unit of finished product, it takes 0.30 liters of Material A at IDR 6,000/liter and 0.20 liters of Material B at IDR 9,000/liter d) Inventories of direct materials as of January 31 were 7,000 units of Material A and 5,000 units of Material B. It is expected that the ending inventory of materials is equal to usage to produce 30% of sales units for the month. e) To produce per unit of product, 0.10 hours of direct work are required in Department I with a wage of IDR 7,000/hour and 0.05 hours of direct work in Department II with a wage of IDR 5,000/hour. f) Variable overhead costs are assigned to products at a rate of $5,000 per direct labor hour and fixed overhead costs are budgeted for $26,400 per month. g) Variable selling costs are Rp.300 per unit of sale, while fixed selling costs and fixed administrative costs are budgeted for 10% and 5% of sales, respectively. REQUESTED: 1. Explain why the Sales Budget is created first before creating other budgets? 2. Explain the importance of budget in profit planning? 3. Prepare an Operating Budget (include your calculations) for February and March 2020 which consists of: 1) Sales Budget 2) Production Budget 3) Direct Materials Purchased Budget 4) Direct Labor Budget 5) Manufacturing Overhead Budget