Dyson (pvt) Limited manufactures a product called Beta. Following information and budgeted figures are provided from January 2021 to March 2021.

i. The sales volume is forecasted to be 10,000 units for January. This is expected to grow by 200 units a month. The selling price is Rs. 2 per unit.

ii. The firms inventory policy is to hold enough units of finished goods at the end of each month to cover 40% of the forecast sales for the next month and raw materials at the end of each month is to be 30% of next month material usage. Opening finished goods inventory at the beginning of January is forecast to be 3,000 units. Opening raw material inventory in January is forecast to be 11,000kg.

iii. Each unit of finished goods requires 3kg of raw material, which costs Rs. 0.15 per kg, and 0.1 hours of direct labour, which costs Rs. 7.50 per hour.

iv. Cash balance as at beginning of January is expected to be Rs. 8,000.

v. 50% of sales are cash sales and 50% of sales are on credit. Credit sales will be received after one month. All purchases are on credit basis and it will be paid after one month. Opening balances to be paid in full in January are receivables of Rs. 4,000 and payables of Rs. 2,000.

vi. Direct labour and overheads are paid for in the month they are incurred. Total budgeted monthly production and non-production overheads of Rs. 6,252 and depreciation of fixed assets is to be Rs. 1500.

a. Prepare the direct labor budget and cash budget from January 2021 to March 2021 and Discuss the expected performance of the company at the budget committee meeting