Question 1 25 Marks The condensed balance sheet of a manufacturing company on 31 December 2018 was as follows: BALANCE SHEET AS AT 31 DECEMBER 2018 N$ N$ ASSETS Non-current assets 312 000 Land and buildings 200 000 Machinery 60 000 Furniture 12 000 Vehicles 40 000 Current Assets 60 000 Inventory Material A 5 000 - Material B 2 000 - Completed goods 16 000 Debtors 30 000 Bank 7 000 Total assets 372 000 EQUITY AND LIABILITIES Equity 346 000 Share capital 320 000 Retained income 26 000 Current liabilities 26 000 Creditors 6 000 Provision for taxation 20 000 Total Equity and Liabilities 372 000

The following details are planned for 2019: Only a single product is manufactured and its composition according to standard is as follows: N$ Material A 2 kg @ N$2.50 5.00 Material B 4 kg @ N$0.50 2.00 Labor 2 hours @ N$3.00 6.00 Overheads 2 hours @ N$1.50 3.00 16.00 Estimated sales 11 000 items @ N$20, 00 each. Desired closing stock: N$ - Material A 6 000 - Material B 3 000 - Work-in-process - - Completed goods 25 600 Selling costs 4 400 Administration costs 10 000 Provision for depreciation is to be calculated as follows: Machinery 10% on cost Furniture 5% on cost Vehicles 10% on cost Company taxation 40% The credit period granted by the suppliers and the delay in payment of debtors can be taken as one month. Required: Prepare the following budgets: Budget Marks 1.1. Sales budget 1 1.2. Production budget (units) 5 1.3 Purchase budget 10 1.4 Labour budget 1 1.5 Overhead budget 7 1.6 Cost of sales budget 1