Keitrikim Ltd produces the following sales forecast for both its products Scrunchi and Bandana for the financial year January 1, 2019 to December 31, 2019:

Details	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Total
Scrunchi	3000	5000	2000	4000	14000
Bandana	1000	2500	1500	3000	8000

Notes:

The company planned to sell one Scrunchi for $800 and one Bandana for $650 during 2019.

The sales forecast for the first period of 2020 is 4500 Scrunchies and 3500 Bandanas.

The closing stock level for both products at the end of each period is to be held at a level equal to 15% of the budgeted sales for the next period.

Management also estimates a monthly deterioration of 30 Scrunchies and 10 Bandanas and 12 units of bonding glue and 15 units of decorative fabrics. They have suggested that a provision should be made for these items deterioration in factory.

To make one Scrunchi, 3 units of bonding glue are required, while 2 units of decorative fabric are required to make one Bandana. The cost of bonding glue is $6 per unit, while the cost decorative fabric is $7 per unit.

Closing raw material stocks in units in store at the end of each quarter is to be equivalent to 5% of the forecasted sales for the preceding period. Budgeted sales for the last period of 2018 were: Scrunchies, 1050 units and Bandanas 1800 units.

At the start of 2019 there were 250 units of bonding glue and 150 units of decorative fabric in store.

Prepare:

The sales budget for both products (5 marks).

The production budget (20 marks).

The direct raw materials usage budget for both products. (5 marks)