Dixon Ltd manufactures and sells 2 products, X and Y, using the same type of materials and labour. Each unit of X requires 5 kgs of material A, 6 kgs of material B and 1 hour of labour; while each unit of Y requires 2 kgs of material A, 4 kgs of material B and 45 minutes of labour. Materials A and B cost 2 per kg and 3 per kg respectively while labour is paid at the rate of 20 per hour.

Variable production overhead is incurred in direct proportion to labour hours worked and the rate is 4 per labour hour.

Monthly fixed production overhead is 50,000, including a fixed monthly depreciation charge of 2,000 for machinery and equipment. Other fixed administration and selling overheads are 5,000 cash per month.

Dixon Ltd pays for its purchases of material A and B the month following the purchase while wages for labour are paid in the month they are incurred.

Half of the variable production overheads are paid in the month incurred and the remainder the following month. All fixed overheads (production, administration and selling) are paid in the month incurred.

Dixon Ltd sells each unit of product X and product Y for 90 and 50 respectively. One quarter (25%) of its customers pay the month following their purchases. Forty per cent (40%) take two months to pay and the remainder is on a cash basis. Dixon Ltd allows a 1% cash discount on all its cash sales and it does not anticipate any bad debts in the foreseeable future.

Following the latest market research, the marketing director anticipates sales of X and Y for April 2021 August 2021 will be as follows:

	April	May	June	July	August
Sales of Product X in units	5,000	7,000	12,000	10,000	9,000
Sales of Product Y in units	12,000	14,000	15,000	14,000	10,000

As at 31^st of March 2021, the company was holding 1,000 units of product X, 1,500 units of product Y, 15,000 kgs of material A and 10,000 kgs of material B in inventory. It is companys policy to maintain a closing inventory of both X and Y equal to 10% of next months sales. Closing inventory of material A and material B should be equal to 20% and 15% respectively of next months production requirements (usage).

REQUIRED C is the question I need answers for

1. For the months of April, May and June 2021, prepare Dixon Ltd.s production budget in units of product X and product Y and materials A and B purchases budget in .
2. For the months of June 2021 only, prepare Dixon Ltd.s cash budget. Assume that the cash balance brought forward on the 1^st of June 2021 will be 500,000 and that there will be no other cash inflows or outflows with the exception of those provided in the question.

3. Budgets are very time consuming, encourage gaming and opportunism and reinforce departmental barriers. Organisations are therefore better off by eliminating the whole budgeting process.