Question 1 Sandown Limited. has provided the following projected information: Year 1 Year 2 Sales units Sales units Qtr 1 Otr 2 Otr3 Otr 4 Otr 1 5,000 6,500 7,000 8,000 8,500 Unit cost of production GHE Material X 8 litres @ GHe3per litre Material Y 5 litres @ GH4 per litre 20 Direct labour 18 Variable Overhead 74 1. The selling price is expected to be GHe 100 per unit. 2. Sales costs are estimated to be 4% of projected sales revenue. The inventory of finished goods at the start of quarter 1, year 1 is expected to be 1,000 units. The inventory of finished goods held at the end of each quarter is projected to be 30% of the following quarter's sales volume. 5. Administration costs are estimated to be GH43,000 per month in quarter 1 of year 1 rising by GH500 per quarter from quarter 2 onwards. The company's budget manual requires each of the following preliminary budgets to be prepared in advance of preparing the company's overall budget: 1 Sales volume and sales revenue budget 2 Production volume budget 3 Purchases volume and purchases cost budget for each of raw materials X and Y 4 Selling & administration overheads budget 5 Labour budget 6 Variable overhead budget Required: 1. Describe the content of and relationship between cach of the preliminary budgets (i) to (iii) mentioned above, in the context of the overall company budget. b. Prepare quarterly budgets for items (i) to (vi) mentioned above and the annual budgeted statement of profit. 4. Question 1 Sandown Limited. has provided the following projected information: Year 1 Year 2 Sales units Sales units Qtr 1 Otr 2 Otr3 Otr 4 Otr 1 5,000 6,500 7,000 8,000 8,500 Unit cost of production GHE Material X 8 litres @ GHe3per litre Material Y 5 litres @ GH4 per litre 20 Direct labour 18 Variable Overhead 74 1. The selling price is expected to be GHe 100 per unit. 2. Sales costs are estimated to be 4% of projected sales revenue. The inventory of finished goods at the start of quarter 1, year 1 is expected to be 1,000 units. The inventory of finished goods held at the end of each quarter is projected to be 30% of the following quarter's sales volume. 5. Administration costs are estimated to be GH43,000 per month in quarter 1 of year 1 rising by GH500 per quarter from quarter 2 onwards. The company's budget manual requires each of the following preliminary budgets to be prepared in advance of preparing the company's overall budget: 1 Sales volume and sales revenue budget 2 Production volume budget 3 Purchases volume and purchases cost budget for each of raw materials X and Y 4 Selling & administration overheads budget 5 Labour budget 6 Variable overhead budget Required: 1. Describe the content of and relationship between cach of the preliminary budgets (i) to (iii) mentioned above, in the context of the overall company budget. b. Prepare quarterly budgets for items (i) to (vi) mentioned above and the annual budgeted statement of profit. 4