Q2. Hobby craft Co. produces a single product. The cost card of this product is as follows: $ per unit Direct Materials Direct Labor Fixed Overhead Total cost 3 kgs per unit at $7 per kg 3 hours per unit at $10 per hour 2 hours per unit at $2 per hour 21 30 4 55 Notes: 1. Hobby craft makes budget on quarterly basis. Each quarter consists of 13 weeks with 5 working days per week. 2. Selling price is $69 per unit 3. Hobby incurs no costs other than those included in the cost card 4. It is Hobby's policy to maintain inventory of finished goods at the end of each quarter equal to 5 days' demand of the next quarter. 5. Because of its perishable nature it is not possible to hold raw material inventory 6. Forecast sales units for the next 5 Quarters are: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 1,850,000 units 2,375,000 units 3,150,000 units 2,375,000 units 1,850,000 units Required: Produce the following budgets for the quarters 1,2,3 and 4. (a). A sales budget showing sales volume in units and sales revenue in dollars. (1.5 marks) (b). A production budget in units, showing opening & closing inventories, sales and production. (2 marks) (c). A purchase budget showing purchases in kg & dollars. (1.5 marks) (Total marks = 5)