Prepare a production budget and direct materials budget for year ended december 31, 2023

Cordon Ltd. is a company that manufactures and sells a single product, which they call a Bleu. For planning and control purposes they utilize a monthly master budget, which is usually developed at least six months in advance of the budget year. Their fiscal year end is December 31. Their sales forecast consisted of these few lines: - For the year ended December 31, 2022: 95,000 units at $60.00 each* - For the year ended December 31, 2023: 105,000 units at $60.00 each - For the year ended December 31, 2024: 110,000 units at $60.00 each "Expected sales for the year ended December 31, 2022 are based on actual sales to date and budgeted sales for the duration of the year. You are provided with the following information: 1. Sales are seasonal with the peak months being summer and winter holidays. The following table shows expected distribution of sales for each month based on percentage of the total budgeted sales. Months Percentage of sales Jan, Feb, Mar 3% each Apr, Aug, Sept 5% each May, Jun, Jul 10% each Oct 11% Nov 15% Dec 20\% 2 2 2/6 2. From previous experience, management has determined that an ending inventory equal to 20% of the next month's sales is required to fit the buyer's demands. 3. There are 2 types of raw material used in the production of Bleu: - Notsoli is the first component, and is purchased in powder form. Each Bleu requires 0.5 kilograms of Notsoi, at a cost of $30.00 per kilogram. Because the supply of Notsoli is unpredictable, Cordon finds it necessary to maintain an inventory balance equal to 40% of the following month's production needs as a precaution against stockouts. - Kancak u is the second component, of which 2 are used in the assembly process per Bleu. In order to ensure this material is always available, Cordon has made a JIT agreement with the supplier which includes on-time and quality assurances. Each Bleu uses 2 Kancaku, which cost $1.00 each. 4. The beginning accounts payable (associated with Notsoi purchases only) will consist of $95,700 arising from the following estimated material purchases for November and December of 2022: Material purchases in November 2022: \$193,150 Material purchases in December 2022: $134,475 Cordon pays for 50% of a month's purchases in the month of purchase, 35% in the following month and the remaining 15% two months after the month of purchase. There is no early payment discount