IMAC Co. manufactures a single high-quality product The Bath Mate. The business uses a system of budgets and budgetary control as the basis of its management accounting system reporting to management on a quarterly basis.

Various levels of management are involved with the planning process to ensure that the budgetary targets are acceptable and realistic.

The following information relates to the four quarters of 2020:

Sales in quarter 1 is estimated at 3,000 units of Bath Mate and this will increase by increments of 500 units for each quarter.

The selling price per unit of Bath Mate is $560.

It is business policy to hold 20% of next quarters sales as ending finished goods inventory.

Each unit of Bath Mate requires 2 kgs of raw materials and each kg of raw material costs $4.

It is company policy to maintain an ending inventory of raw materials equal to 10% of the next quarters production requirements.

It takes two labour hours to produce one unit of Bath Mate and the hourly labour rate is $10.

The variable manufacturing overhead per labour hour is $3 and the fixed manufacturing overhead for quarter 1 is $57,100 and is expected to increase by $3,000 each quarter.

Required:

Prepare the following functional budgets for each of the quarters for 2020 and in total:

Sales budget

Production budget

Material purchase budget

Direct labour budget

Manufacturing overhead budget