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Question 1 The following data and estimates are available for AGT Ltd for June, July and August: June July August Sales $45,000 $50,000 $60,000 Wages

Question 1

The following data and estimates are available for AGT Ltd for June, July and August:

June

July

August

Sales

$45,000

$50,000

$60,000

Wages

$12,000

$13,000

$14,500

Overheads

$8,500

$9,500

$9,000

The following information is available regarding direct materials:

June

July

August

September

Opening stock

$5,000

$3,500

$6,000

$4,000

Material usage

$8,000

$9,000

$10,000

Notes:

1. 10% of sales are for cash, the balance is received the following month. The amount

received in June for May's sales is $29,500.

2. Wages are paid in the month they are incurred.

3. Overheads include $1,500 per month for depreciation. Overheads are settled in the month

following. May's overheads amounted to $6500.

4. Purchases of direct materials are paid for in the month purchased.

5. The opening cash balance in June is $11,750.

6. A tax bill of $25,000 is to be paid in July.

:

how do i Prepare the Direct Materials Purchases budget for the months June, July and August.

i am feeling lost please explain

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