Question 2: (40 points) Empire Chemical Company produces three products using three different product lines. One of these products is Yarex which is sold in boxes to wholesalers. The controller of the company's Yarex Product Division is currently preparing a budget for the coming three months from August to October of 2020. July actual sales was 7,000 boxes. The following sales forecast has been made by the division's sales manager. August September October 8,000 boxes 9,500 boxes 9,000 boxes Each box of Yarex requires 10 Kgs of material Gamma and 1.5 hours of direct labor. Each box of Yarex sells for $80. Material Gamma costs $ 0.80 per kg, and the division ends each month with enough materials to cover 10 percent of the next month's production requirements. The division incurs a cost of $19.00 per hour for direct-labor wages and fringe benefits. The Yarex Product division ends each month with enough finished-goods inventory to cover 20 percent of the next month's sales Required: Complete the following budget schedules for August to October. A Sales budget of Yarex (10 points); July August September October Sales (in boxes). 7,000 Sales price per box $80 Sales revenue $560,000 B. Production budget (in boxes) (10 points) July August September October Sales 7,000 Add: Desired ending inventory... 1.600 1.700 Total requirements 8,600 Less: Projected beginning inventory... (1.400) Planned production.. 7,200 ACTI10 Managerial Accounting Frokost Dr. Stomando Summer 2000 31Page C. Raw material (Gamma) purchases (10 points) July August September October Planned production (Yarex boxes) 7,200 Raw material required per box (Kgs) x 10 Raw material required for production (Kgs)..... 72,000 Add: Desired ending inventory of RM (kgs).... 8.300 8.500 Total requirements (es) 80,300 Less: Projected beginning inventory of RM (Kg) [7.200) Planned purchases of raw material (kgs). 73,100 RM cost per kg x 50.80 Planned purchases of raw material (dollars).... $58.480 D. Direct-labor budget (10 points); July August September October Planned production (boxes) 7,200 Required direct-labor hours per box x 15 Direct-labor hours required 10,800 Cost per hour. $19 Planned direct-labor cost $205.200