Question 3 - Learning Goal #3 (10 marks):

A toy industry company produces a kind of toys, the process of making is done in two workshops, namely preparation and completion, using two first materials, plastic and adhesive. For the purpose of preparing the estimated budgets, the following information was available:

* Estimated sales during the first two months of next year are shown in the following table, and the unit's selling price is Sar 380:

January-	February
2500 games	2600 games

First month's product inventory: 30% of same-month sales, and March sales volume 2200 toy.

One toy production requires 0.8 kg of plastic at 13 riyals per kg, and 0.1 kg of adhesive at 10 dj per kg.

Stock of raw materials (in kg) at the end of the month as follows:

Month	January-	-February
Plastic	3000	2005
Adhesive	1000	1000

* Stock at the beginning of January and February plastic and adhesive as much as b respectively: 3500 kg and 1000 kg.

* Hours needed from direct labour to produce one unit estimated at: 2 sa for 25 riyals/s in the preparation workshop, and 1 sa for 30 riyals/s in the completion workshop

.

* Annual fixed indirect industrial expenses: maintenance of SR 6,000, fire insurance 9600 Riyals. The variable indirect industrial expenses are based on the direct working hours of each month as follows: motoring forces 0.3 riyals, heating and lighting 0.2 riyals, work 0.3 riyals.

* Estimated marketing and administrative costs include: packaging expenses 3 riyals per unit sold, insurance expenses: 7,000 riyals per month, total distribution expenses for January and February: 5,100 riyals distributed by sales value, and administrative costs estimated at 20,000 riyals per month.

* The value of sales is received in cash during the month in which the sale is made, the purchases are paid at the end of every two months, the other expenses are paid as soon as they are achieved, and the cash balance at the beginning of January is estimated at 1000 riyals

.

Required: Preparing estimated sales, production, raw materials, direct labour, indirect industrial expenses, marketing and administrative expenses, and treasury (cash), for January and February.