Q 3) Budgets (Total Marks:20) Operational Budgets Qatar Beverages wishes to calculate an Operating Budget in the following period. Information regarding products, costs & sales levels is as follows: Product A B Materials required X (Kg) 2 3 Y (litres) 1 4 Labour Hours required Skilled 4 2 Semi Skilled 2 5 Sales Price ($/U) 10 5 Sales level (units) 2,000 1,500 Opening Inventory (units) 100 200 Closing Inventory of materials and finished goods will be sufficient to meet 10% of demand. Opening Inventory of material X was 300Kg and for material Y was 1,000 litres. Material prices are $10/kg for material X was 300kg and for material Y was 1,000litres. Material prices are $10/kg for material X and $7/litre for material Y. Labour costs are $12/hr for the skilled workers and $8/hr for the semi-skilled workers. 

Required (8) Produce the following budgets:

 a) Production (units); 

b) Material usage (Kg and litres);

 c) Material Purchases (Kg, litres, & $);

d) Labour (hours & $) 

Among above which of the Budget will be set first and why? Cash Budget (3) Month 1 2 Cash Sales 500 750 Credit 1,000 1,500 Cash Purchases 250 500 Credit Purchases 400 800 Depreciation 200 300 If all credit transactions are settled a month in arrears, what is the Net Cash Flow for month 2?