BUDGETING QUESTION

Zedbajeti Ltd $($ZB$)$ is embarking on budgeting for the forthcoming period and to this end data have been collected in preparation for this exercise. Some of these data are as follows:

$1.$ Marketing research has shown that the company will be able to sell $12,000$ units of the company product at a selling price of K$150$ per unit in the budget period.

$2.$ Product costing data are as follows:

K

Direct material $3$ kgs @ K$5$ per kg $15$

Direct labour $2$ hours @ K$10$ per dlh $20$

Production overhead $2$ dlh @ K$2\mathrm{.}5$ per hour $5$

Product cost per unit $40$

$3.$ Data about inventories are as follows:

Opening Closing

Finished goods $($units$)1,5002,500$

Raw materials $($kgs$)1,5004,500$

$4.$ Selling and distribution costs are expected to amount to $20\%$ of the sales revenue.

$5.$ Administrative expenses are expected to be $10\%$ of the sum of selling and distribution expenses and production cost.

$6.$ General expenses will be K$47,500$

$7.$ Income tax will be at $25\%$

$8.$ Board of Directors expect to declare dividends to the extent of $50\%$ of net profit after tax

Additional information

Share capital K$250,000$

Share Premium K$50,000$

Revenue reserves excluding the year$$s retained profit Revenue reserves b$/$f K$171,470$

Non$-$current assets $($Net Book Value$)$ K$975,750.$

Current assets excluding closing inventories of finished goods and raw materials K$315,620.$

Current liabilities excluding income tax payable and dividends payable K $17,900.$

Long term loan K $100,$ OOO.

Required

Prepare the all the budgets including the budgeted financial statements for the budget period