(Question 1)

The Purchasing department of Quality Machines Ltd. has responsibility for all aspects of companys purchase of suppliesincluding the management of the human resource function within their department like the hiring of new employees, and all terminations.

The Purchasing department cost report for the completed 2022year is as follows:

Average number of employees		20
Number of new hires		5
Number of management employees		4
Purchasing department costs (2022)
Salaries		$1,500,000
Employee benefits (30% of salaries)		Calculate
Office expenses (10% of salaries)		Calculate
Travel costs (20% salaries)		Calculate
Rent		120,000
Total actual cost		Calculate

(Assumptions)

In 2023, it is expected that the number of employees will increase to 25; there will be 5 new employees hired each earning an average of $60,000. Assume the new employees all start for July 1, 2023. All department costs aside from salaries are budgeted to have a 5% inflation increase commencing at the start of 2023.

Required

Using the assumptions provided along with the 2022 department financial information, prepare a Purchasingdepartment cost/expense budget for 2023. Explain how you would monitor this budget on a monthly basis.

(Question 2)

The Furniture Company manufactures wood kitchen tables. The company will often hire underemployed individuals and provide them the carpentry skills in order for them to obtainhigher paying employment in the future.

Each table requires 10 board feet of lumber plus fittings, which cost $20 per board foot and fittings of $50 per table. Direct labour paid is $20 per hour, and it takes 12 hours to make each table. The facility in which the tables are made is rented for$2,500 per month. Depreciation for all the manufacturing equipment in the production facility for the plant is $1,000 per month. Other production and administrative overhead (all of which is fixed cost) is $5,000 per month. Each table is sold for $990. Average monthly sales are 25 tables per month.

Required

Calculate the following: variable cost per table, contribution margin per table, total fixed cost per month, and monthly break even in units and sales dollars. Explain how you would use the information of break-even in the running of this business.

Please explain fully