Big Boss Project Big Boss Limited was formed two years ago by Joshua Sealers. He had the idea to make a product for Quick Service Restaurants that would be easy and convenient to prepare. He bought several used plant and equipment from a company that was involved in making a similar product but was leaving the industry. Big Boss estimated that the equipment would be able to last for 10 years once it was properly maintained. He called his finished product Sweet. The budget for the next four months ending 31 July 2023 is to be prepared. The following data was gathered: [A] Projected Statement of Financial Position as at 31 March 2023: $ $ ASSETS Non-current Assets Plant and equipment at cost 1,440,000 Less Accumulated depreciation 288,000 1,152,000 Current Assets Raw materials 30,750 Finished goods 38,750 Accounts Receivables 200,000 Cash 554,250 823,750 1,975,750 EQUITIES AND LIABILITIES Capital Share capital 1,147,300 Accumulated profits (Retained Earnings) 600,000 1,747,300 Current Liabilities Accounts Payables 228,450 1,975,750 [B] Sales and production data: Sweet Sales demand for finished goods: April 5,000 units May 7,500 units June 12,500 units July 15,000 units August 12,000 units Selling price per unit $200 Finished goods: Projected closing inventory at 31 March 2023 250 units Unit cost of finished goods inventory $155 per unit Variable production overhead direct labour hours required for production: Processing 12 mins Cost per hour for variable overhead $50 per hour Fixed production overhead per month including depreciation of $8,000 $45,000 Material requirement per unit: Raw material 0.40 lbs Direct labour hours required per unit 12 minutes Direct labour rate per hour $100 per hour [C] Raw materials Material Closing inventory in lbs at 31 March 2023 102.50 Closing inventory in lbs at 31 July 2023 597.50 Budgeted cost of raw material per lb $300 per lb Actual costs per pound of opening raw material inventories are as budgeted for the coming period. [D] The company maintains a policy of holding 5% of the next months demand for Sweet in inventory. The policy for raw materials is to maintain 5% of next months requirements in inventory. [E] Collection from customers is expected to be as follows: 90% in the month in which the sales are made 10% in the first month after the sale [F] 80% of all raw materials purchased are expected to be paid for in the month of purchase with the remaining amount being paid in the following month. [G] Selling and Administrative expenses are expected to be: Variable 2% of sales revenue Fixed $100,000 per month including $4,000 for depreciation. [H] Tax payable represents 25% of profit before tax and is paid on March 15 each year for profit made in the prior year. Profit before tax for the year ended December 31, 2022 was $600,000. Required: 1. Prepare the following budgets for Best Friends Pre-season Limited by month and in total for the four months ending July 31, 2023: (a) Sales budget. (6 marks) (b) Schedule of cash collected from customers. (10 marks) (c) Production budget. (17 marks) (d) Direct-material usage and purchases budget. (23 marks) (e) Schedule of cash disbursement to suppliers for direct material. (10 marks) (f) Direct labour budget. (9 marks) (g) Production overhead budget. (11 marks) (h) Selling and administrative budget (11 marks) (i) Cash budget (25 marks) 2. Prepare the following budgets in total only for the four months ending July 31, 2023: (a) Cost of goods sold budget. (8 marks) (b) Budgeted Statement of Profit or Loss. (5 marks) (c) Budgeted Statement of Financial Position. (13 marks) [Total 150 marks]