NorthGreat company produce and sell bamboo frame for $40each.

Requirements of direct materials and direct labour to produce each bamboo frame are as follows:

Direct material	6.4 linear feet of bamboo		Direct labour	0.8 hours
	at $3.2 per foot			at $19.20 per hour

The following table shows the planned inventory levels of the company:

	Raw material		Finished goods
	Beginning balance	Ending balance	Beginning balance	Ending balance
March	288	324	80	100
April	324	408	100	120
May	408	468	120	160
June	468	474	160	150
July	474	484	150	170
August	484	502	170	150

Expected unit sales (number of frames) for the following months:

March	440
April	400
May	480
June	640
July	600
August	680

The company usually use a single application rate of $0.48per unit produced for variable manufacturing overhead. General manager predicts that the annual fixed manufacturing overhead will be approximately $11,520 for the coming years expected production of 6,000 units. Expected monthly expenses of selling and administrative are estimated $1,040 per month plus $0.90 per unit sold.

Required:

Part 1. Prepare the following for NorthGreat for the second quarter (April, May, and June). Include each month as well as the second quarter total for each budget.

a. Sales budget. [4 marks]

b. Production budget. [4 marks]

c. Direct materials purchases budget in units and dollar amount. [4 marks]

d. Direct labor budget in hours and dollar amount. [4marks]

e. Manufacturing overhead budget. [4 marks]

Part 2. Suppose that the company had $10,800 cash at bank at the beginning of the second quarter. Cash sales average 80 per cent of total sales (refer to your answer to part a). Credit sales are collected 50 per cent in the month of sale and 50 per cent in the month following sale. Prepare budgeted cash receipts. Include each month (April to June) as well as quarter 2 totals. [4