OMG Ltd

You are the recently appointed accountant at OMG Ltd is a new company, which will be incorporated on $1$st April $2022.$ Initially the company will manufacture and sell a single electronic product used in the production of drones. The following details relate to the company$$s first financial year:

Selling price $300$ per unit.

Direct materials cost $85$ per unit

Direct labour is $6$ hours per unit for the first $2$ months, reducing to $5$ hours per unit thereafter.

Direct labour cost $13$ per hour

Sales targets for the forthcoming financial year are as follows:

Year $-$ Units

April $(2022)1200$

May $1400$

June $1500$

July $1900$

August $2000$

September $2000$

October $2100$

November $2200$

December $2000$

Januray $(2023)1800$

February $1800$

March $1900$

$85\%$ of sales will be on credit terms, with customers paying two months later. The remaining sales are paid for immediately. Closing inventory is planned to be $10\%$ of the following month$$s sales target. Closing inventory is valued on an average$-$cost basis, calculated by using the $$cost$-$ of$-$ sales$$ figure for the year. Sales for April $2023$ are expected to be $1,700$ units.

Direct materials will be purchased the month they are required for production and paid for the following month. A variable overhead rate of $15$ per direct labour hour is required for the production overheads. Variable distribution costs of $10$ per unit sold will also be incurred.

Total fixed production overheads of $110,000$ and total fixed administration and distribution overheads of $75,000$ for the year will be incurred on an even basis throughout the year. All overheads and the direct labour costs will be paid for in the month in which they are incurred.

All production machinery will be leased; the costs of leasing the machinery are included in the above figures. OMG Ltd will also buy equipment that will be used mainly in the I.T$.$ department. They will purchase and pay for the equipment in June $2022.$ The equipment will cost $25,000$ and will be depreciated by $20\%$ per annum. Depreciation is not included in the overhead details given above.

OMG Ltd will issue $140,000$ ordinary shares of $1$ at par for cash on $1$st April $2022$ and the company is unwilling to issue any further shares at this stage.

QUESTIONS $($PLEASE COMPLETE IN MICROSOFT EXCEL FILE$)$:

A Microsoft Excel file which shows:

The following monthly budgets $($on a single worksheet$)$ for the $12$ months ended $31$st March $2023$ in as much detail as the information given allows $($you should also include total columns for the year$)$:

$1.$The Production Budget $($in units$)$

$2.$The Sales Budgets $($in $)$

$3.$The Materials Purchases Budget $($in $)$

$4.$The Direct Labour Budgets $($in $)$

$5.$The Overheads Budgets $($in $)$

$6.$The Depreciation & Capital Expenditure Budget $($in $)$

A Monthly Cashflow Forecast for the company for the $12$ months ended $31$st March $2023($you should also include a total column for the year$)$

And a forecast Income Statement for the year$-$ended $31$st March $2023$

PLEASE COMPLETE IN MICROSOFT EXCEL!!

Thanks :)