Jackson Chan's brother, Johnson, owns Good Life Pte Ltd, a company that produces tonic soup packs. Its latest product is an organic ginseng chicken soup pack. The chicken soup pack contains 2 main ingredients - chicken and ginseng. The following information relates to the estimated sales and production of the food pack for the month of January 2021.

Selling price per pack

$68

Expected sales volume (soup pack)

54,000 packs

Estimated inventory (soup pack),1 Jan 2021

9,600 packs

Estimated inventory (soup pack), 31 Jan 2021

Refer to note 1

Direct materials (Chicken) required to produce one pack

2.40 kg

Direct materials (Ginseng) required to produce one pack

0.3 kg

Additional notes:

1.The desired ending inventory of finished goods (soup pack) is equal to 20% of next month's sales.Budgeted sales volume in February 2021 is 56,000 packs.

2.The estimated direct material (chicken) is 11,300 kg on 1 Jan 2021 and the desired balance is 12,500 kg on 31 Jan 2021. Each kg of chicken costs $5.50.

3.The estimated direct material (ginseng) is 1,400 kg on 1 Jan 2021 and the desired balance is 1,900 kg on 31 Jan 2021. Each kg of ginseng costs $25.

4.A food pack takes a worker 1.5 hours to process and the company pays its workers an hourly rate of $6.

5.The cost of variable production overhead is 3.20 per soup pack.Fixed production overhead is $27,800 per month, to be allocated equally to the soup packs produced.

Required:

a)Prepare the following budgets for the month of January 2021:

i)Sales budget

ii)Production budget

iii)Direct labour cost budget

iv)Direct materials purchases budget

Partially completed budget templates are shown on the next two pages for your reference.

(9 marks)

b)Determine the budgeted product cost per soup pack.