31 Sensitivity Editor Reuse Files Editing Voice Styles () Prepare the following budget for the year ending 21 Den Your answer should shows for each quarter and the year in ta Sale budget and ins) (5 m) A la preparing widget tye 31 December, produces and be product of 125. maled at the ling price will increto 10 tom 1 and it is bugeted that the seven unit for nach abwe TOUT 1 QUEZ CS Quarto 500G TO EST OG Production budget of finished good in una (4) Raw material wage budget for X Y Z inny ma O Productos con budget in Workings should be caly shown for allements of this Sin for the fire of the following year will be 50.000 unit Each X Yand and the queries required for one un ole tehdit and the scaled cost per una FR one unit of Tintahad Raw material coal mata goods C7 per 52100 16 per kg 133 Det kg The Managing Director of the company does not emphasis on the parance of pag budges in your own how the information you have provided in partial could be used to prese and the bent this would provide to the business Tot 5 mars I The color and Ypecto increase by 10% with from And yesbar Lace finished the hun bon the labour cost per hos Thy hou Odbor Wedd Recent den bedste redsedot mechanics of reto Then Mohon Contest on the next page Question 1 Airways Ltd is preparing its annual budget to the year end 31 December. It produces and sells one product at a selling price of 125. It is estimated that the selling price will increase to 130 from 1 July and it is budgeted that the sales levels, in units, for each quarter will be as follows: Quarter 1 35,000 Quarter 2 45,000 Quarter 3 25,000 Quarter 4 42,000 Sales for the first quarter of the following year will be 50,000 units. Each unit requires raw materials X Y and Z and the quantities required for one unit of the finished product and the associated cost per unit are: Raw Quantity to make one unit of finished Raw material cost: material: goods: X 5 kgs 7 per kg TY 2 kgs 4 per kg Z 1.5 kgs 25 per kg The cost of raw materials X and Y are expected to increase by 10% with effect from 1 April and Z by 2% from 1 October. Each unit of finished goods requires 3 hours of labour and the labour cost per hour is 12. This will increase by 10% per hour on 1 October Variable overheads are E8 per unit of finished goods Fixed overheads are budgeted at 303 325 for the year and are absorbed based on the total number of budgeted production units Opening inventories of finished goods are 8 000 units and closing inventories of finished goods are expected to be 15s of the next quarter's sales The company operates a just-in-time approach in re ation to raw materials and no opening on closing raw materials are neid continued on the next page Required: (a) Prepare the following budgets for the year ending 31 December. Your answer should show values for each quarter and the year in total: (0) Sales budget (in and in units) (5 mark (1) Production budget of finished goods (in units) (5 mark (ii) Raw material usage budget for X Y and Z (in units) (6 marks (iv) Production cost budget (in ) (14 marks Workings should be clearly shown for all elements of this question (b) The Managing Director of the company does not place emphasis on the importance of preparing budgets. In your own words explain to them how the information you have provided in part (a) could be used to prepare a cash budget and the benefit this would provide to the business (5 marks) (Total 35 marks)