Question 2 (29 marks) Satellite Communications Ltd ("SCom") is a Namibian based company that manufactures a component required in the telecommunications industry. The company prepares budgets on a quarterly basis. The budgeted sales for the first three months of 2021 are as follows: Sales Month 1 28 000 units Month 2 32 000 units Month 3 22 000 units It is company policy to keep a closing inventory equivalent to 20% of the following month's sales. The sales units of Month 1 and Month 4 are always the same in any quarter. The forecast sales for Month 4 are 24 000 units. Direct labour required for one unit is budgeted as follows: Molding Department 3 hours at N$8 per hour Polishing Department 2 hours at N$8 per hour The Molding department employs a permanent workforce of 400 workers while the Polishing department employs 280 permanent workers. When demand has increased and additional manpower is needed, it can easily be hired from the local market. The normal working day has 8 hours and all employees work from Monday to Friday. Each working month has four (4) weeks. Page 15 of 16 Mark 9 6 6 Requirement 2.1 Prepare a Production Budget, in units, for each of the Months 1, 2 and 3 2.2 Prepare the Direct Labour Budget, in hours, for both the Molding and Polishing Departments for each of the Months 1, 2 and 3. 2.3 Prepare the Direct Labour Cost Budget for both the Molding and Polishing Departments for each of the Months 1, 2 and 3. Do you think SCom will have to hire additional employees in any of the three 2.4 months? If so, how many additional employees will be needed in each of these two departments for each month? Show all workings where necessary. N.B. Where applicable show all workings. Total 8 29