George Ltd manufactures and sells two different types of coils used in electric motors. In September, Jessica Martin, the management accountant, compiled the following data for the upcoming annual budget.

Use of direct material:

Amount used per unit

Direct material Light coil Heavy coil

Sheet metal 4 kilograms 5 kilograms

Copper wire 2 kilograms 3 kilograms

Platform 0 1 unit

Raw material prices and inventory levels:

Raw material Anticipated purchase price Expected inventories 1January Desired inventories 31December

Sheet metal $8 32 000 kilograms 36 000 kilograms

Copper wire $5 29 000 kilograms 32 000 kilograms

Platform $3 6 000 units 7 000 units

Direct labour requirements and rates:

Product Hours per unit Rate per hour

Light coil 2 $30

Heavy coil 3 $40

Manufacturing overhead:

Activity Cost per unit of activity driver

Material handling:

Sheet metal and copper wire $0.50 per kg of raw material purchased

Platform $0.10 per unit purchased

Machine related $1.50 per machine hour

*Shipping $2.00 per coil shipped

General manufacturing overhead $1.20 per direct labour hour

* Total annual machine hours are 100 000 for light coils and 200 000 for heavy coils.

Finished goods inventories (in units):

Product Expected 1 January Desired 31 December

Light coil 20 000 25 000

Heavy coil 8 000 9 000

Sales forecast:

Product Units Price

Light coil 60 000 $130

Heavy coil 40 000 $190

Required:

Prepare the following budgets:

1. sales budget (in dollars)
2. production budget (in units)
3. direct material purchases budget (in quantities)
4. direct material purchases budget (in dollars)
5. direct labour budget (in dollars)
6. manufacturing overhead budget (in dollars).