Direct labour budget, factory overhead budget, and ending inventories budget

For the financial year ending in June 30

Project 4 -Operating budgets for a manufacturing organisation (Chapter 6) Tait Manufacturing supplies large wholesalers and retailers. As the accountant you have been asked to prepare operating budgets for the next financial year Sales 1. Estimated sales in units are: 7-30/9 15 000 Second quarter 1/10-31/12 16 500 /1-3113 17 000 1/4-30/6 18 000 1/7-309 16 000 First quarter Third quarter Fourth quarter Fifth quarter 2. Selling price per unit will continue to be $75 320% of sales are for cash, 80% of sales are on credit. 4. The pattern of collections from accounts receiyable is anticipated to be: 85% in the quarter of sale; and, 15% in the quarter following the sale. Production is organised so that finished goods inventory at the beginning of each quarter will be 25% of the expected unit sales for that quarter. 1. Budgeting. Third Edition 33