Dell & Company makes and sells computer components.

Sales in October, November and December 2019 were $1,600,000, $1,800,000 and

$1,400,000 respectively. All sales are on credit. Collections from debtors are as follows: 40% in the month following the sale, 30% in the second month following the sale, and 20% in the third month following the sale. The remaining 10% are uncollectable.

The data below relates to the production and sales of its product for January, February and March 2020:

	January	February	March
Direct labour hours per unit	6.0	5.5	5.5
Direct labour hourly rate	$ 9	$ 10	$ 10
Direct materials cost per unit	$ 15	$ 16	$ 16
Estimated sales	15,000 units	16,000 units	18,000 units
Selling price per unit	$ 100	$ 120	$ 120

Dell expects to have 5,000 units in inventory on 31 December 2019, and has a policy of carrying 25% of the following months projected sales in inventory.

Required:

1. Prepare the following budgets for Dell & Company for January and February 2020. Show all workings and calculations:

1. Production Budget (in units)

2. Direct Labour Budget (in hours)

3. Budget (in dollars)

4. Sales Budget (in dollars)

2. Calculate the budgeted Contribution Margin for January and February 2020. Show all workings and calculations.

3. Calculate the budgeted receipts (collections) from debtors for January and February 2020. Show all workings and calculations.