QUESTION 1 (25 MARKS) Real Perfume Bhd manufactures perfumes called Rosy Aroma which is sold at RM100 per bottle throughout Malaysia, Singapore and Indonesia. The company is currently planning raw material requirements for the third quarter, which is when Rosy Aroma's peak sales occur. The following information was gathered for the budget preparation purposes: 1. Rosy Aroma is made of essential oil namely rose oil and three grams of rose oil is required for each bottle of Rosy Aroma. The cost of the rose oil is RM500 per kilogram. 2. Rose oil has grown in popularity as a perfume ingredient to the point where substantial stockpiles are required to avoid stock outs. To keep production and sales moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of each month must equal to 30,000 bottles of Rosy Aroma plus 20% of the next month sales. The finished goods inventory on 30th June is budgeted to be 100,000 bottles. ii. The raw material inventory on hand at the end of each month must equal to 50% of the following month's production needs for materials. The raw materials inventory on 30th June is budgeted to be 540,000 grams of rose oil. iii. There are no work-in-progress inventories in the company 3. Budgeted sales units: Months July Sales units 350,000 August 400,000 September 500,000 October November December 300,000 200,000 100,000 4. The production labours are paid at a basic rate of RM8 per hour and each bottle of Rosy Aroma requires 3 labour hours. Required: a. Prepare a sales budget for Rosy Aroma for the month of July, August, September. b. Prepare a production budget for Rosy Aroma for the month of July, August, September and October. c. Prepare a direct material usage and purchases budget for Rosy Aroma for the month of July, August and September. d. Prepare a direct labour budget for Rosy Aroma for the month of July, August and September. e. Provide TWO (2) suggestions how companies can eliminate budgetary slack in budget preparation process