Budgeting 4.01 One product produced by Totteridge Ltd is the Epsilon 3 Forecast sales are Month Sales (units) 1 12,000 2 12,500 3 12,200 Opening inventory of finished goods in Month 1 should be 6,000 units This should increase by 1,000 per month One unit of Epsilon 3 is made from 3kg of material Each kg cost 8 Inventory of material at the beginning of Month 1 is 9.000 kg This should be reduced by 500 kg each month One unit of Epsilon 3 takes 2 hours to manufacture Each employee is paid 8 per hour worked Each unit of finished goods at the beginning of Month 1 cost 49 Fixed production overheads are 141.000 per month Epsilon 3's are sold for 75 each Opening inventory of finished goods in Month 1 should be 6,000 units This should increase by 1,000 per month One unit of Epsilon 3 is made from 3kg of material Each kg cost 8 Inventory of material at the beginning of Month 1 is 9,000 kg This should be reduced by 500 kg each month One unit of Epsilon 3 takes 2 hours to manufacture Each employee is paid 8 per hour worked Each unit of finished goods at the beginning of Month 1 cost 49 Fixed production overheads are 141.000 per month Epsilon 3's are sold for 75 each Required: a) Calculate units to be produced and the finished good inventory for each month b) Calculate the material usage each month in kg and c) Calculate the material purchases each month in kg and d) Calculate the labour budget each month in hours and e) Prepare an operating budget for the three-month period