ABC Pty Ltd produces turbines used in the production of hydro-electric generating equipment. The turbines are sold to various engineering companies that produce hydro- powered generators in Australia.

Details of the operations for the coming four months are provided in the attached excel spread sheet.

Other information:

• The company plans to purchase land for future expansion
• Sales are on credit. Amounts not received in the month following the sale are written off as bad debt immediately.
• The payment for labour and purchases of materials and other costs are for cash and paid for in the month of acquisition.
• If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage (including any interest payments due ). Any cash borrowed is repaid one month later, as is the interest due.

During the process of preparing the organisations budget, the Sales Manager is discussing the possible outcome of the forthcoming election with the Production Manager. She noted that if one of the major political parties wins the election and forms the government, there is a strong possibility that alternative sources of energy such as hydro-powered electricity may no longer be as actively supported by the new government as is the case under the current government.

The sales managers primary concern is that market for alternative power generation is already volatile and subject to significant uncertainty. The production manager is also concerned about his plans to build the new automated manufacturing facility on the land to be purchased in May. This new manufacturing facility will enable him to manufacture, in-house, the major two parts he is now purchasing and to significantly automate the assembly process that is currently somewhat labour intensive. His projection for the new facility indicates a reduction in direct material & direct labour costs of 33% but that his fixed manufacturing overheads are likely to increase by 65% due to the increased investment in production capacity.

Question

1) Monthly Sales Budget for the quarter ending June

2) Monthly Production Budget for the quarter ending June

3) Monthly Direct Materials Budget for the quarter ending June

4) Monthly Direct Labour Budget for the quarter ending June

5) Monthly Manufacturing Overhead Budget for the quarter ending June

Please include calculation formats.

ARC TV LED Sales April May 67,500 $6,200 June 54,000 July 60,750 81,000 Actual Sales Volume 3-moths to June 162,200 Units Unit selling price The desired finished goods inventory for each month is The full absorption cost of the opening finished goods inventory's The variable manufacturing cost of the opening finished goods inventory is Finished goods Inventory on April 1 is Materials required to be on hand at the beginning of the month to produce 60% of the next month's sales $4,730 per unit $1,930 per unit 43,200 units 20% of that month's estimated sales Direct Material used per unit Blades Quantity Cost per unit Rotor 4 $81 Actual Material Used - 3 months to June Rotor Blades 750 000 729,100 Actual cost of material Used - 3 months to June $41.651,840 $80 883,580 $108 Budgeted Direct Labour time per unit 8 hours Direct Labour cost per hour $50 Actual Labour Used - 3 months to June 1,662,590 Actual cost of labour Used - 3 months to June $70,660,100 Recent statistical data for Maintenance costs Budgeted Manufacturing Overheads Fixed Cost component per month Variable Cost component per DL hour Indirect labour Power Maintenance $0 50 ?? $56.70 55.40 ?? Labour Hours 1,302,800 1.485.000 1,363,500 1.242,000 Total Maintenance costs $79,920,000 $86,805.000 $82,215,000 $77,625,000 Supervision Depreciation Rates & Utilities Other $37,800,000 $3,375,000 $2,789,100 $13,500,000 **** $0 SO $0 $ $40.50 April May $62,775,000 June $50,220,000 $56,497,500 Variable Selling Expenses Fixed Selling & Admin Expenses Total Selling & Admin Expenses $24,300,000 $19,440,000 $21,870,000 $87,075,000 $69,660,000 $78,367,500 Cash on hand at opening $3,375,000 Annual interest rate on borrowing 6% Cash Sales Received in month of sale Received in month after sale $0 80% 18% Balance of accounts receivables at the start of the month $82,863,000 Dividends paid in June Land purchased in May $1,194,750 $185,100,000