Chapter $9$

Tonga Toys manufactures and distributes a number of products to retailers. One of these products, Playclay, requires $0\mathrm{.}10$ hours of labour time manufacture each unit. The company is now planning labour needs for the third quarter $-$ July, August, and September. Currently, the average rate per labour hour is $$16$ per hour. Peak sales of Playclay occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements:

a$.$ The finished goods inventory on hand at the end of each month must be equal to $20\%$ of next month's sales. The finished goods inventory on June $30$ is budgeted to be $16,400$ units.

b$.$ The company maintains no work in process inventories

A sales budget for Playclay for the last six months of the year follows:

$\backslash$table$[[,$Budgeted Sales in Units$],[$July$,52,000],[$August$,75,000],[$September$,],[$October$,78,000],[,80,000]]$

Required: $$

Prepare a production budget for Playclay for the months July, August, September, and total for the quarter. $-12$ Marks

Prepare a Labour budget for Playclay for the months July, August, September, and total for the quarter. $-12$ Marks