Brownie Ltd is preparing its budgets for the first six month of 2009. It manufactures and sells one product, Product Z, which uses two different raw materials in its production. The current selling price of Product Z is $250 per unit. It is planned to increase this price by $25 per unit from 1 May 2009 to compensate for an expected increase of 10% in the cost of both raw material and a 6% rise in direct labour costs. These cost increases are due to take effect from 1 April 2009. Sales units in 2009 are expected to be: January 500 May 500 February 550 June 580 March 630 July 620 April 650 The following current usage and cost information per unit of Product Z is available: Material A 5 kg @ $4/kg Material B 7 kg@ $6/kg Skilled direct labour 5 hours @$7.50/hour Unskilled direct labour 3 hours @$4.80/hour Variable production overhead $3.50 per direct labour hour Fixed production overhead $240,000 per year From February 2009, Brownie Ltd plans to hold closing stock of Product Z equal to 20% of the next month's sales. Raw materials will be purchased two weeks before they are required for production. Assume each month consists of exactly four weeks. Opening stocks on 1 February 2009 are expected to be: Product Z 110 units Material A 1,415 kg Material B 1,981 kg You are required to produce the following budgets, showing for each month of February. March, April and May 2009: a) b) c) Sales budgets($) [2 marks] Production budgets(units) [4 marks] Material purchases budgets for Material A and Material B respectively (kg and $). [8 marks] Labour budgets (hours and $) for each of skilled and unskilled. [6 marks] d)