Required:

(a)

Prepare the sales budget for EACH of QUARTERS 1 and 2 of 2020 for:

i)D12; and

ii)D11

(4 marks)

(b)

Prepare the production budget for QUARTER 1 ONLY of 2020 for:

D12; and

D11

(8 marks)

(c)

Prepare the materials purchases budget in units and in dollars for QUARTER 1

ONLY of 2020.

(5 marks)

(d)

Prepare the direct labour budget in dollars for QUARTER 1 ONLY of 2020

(3 marks)

Question 2 (20 marks) SIMply Industrial manufactures two models of industrial drills - D12 and D11. The retail price for both models are $620 and $380 per unit respectively. Projected sales for the next four quarters for the two models are as follows: The company's policy on finished goods balance is to keep a portion of next quarter's budgeted sales at the following rates: The finished goods inventory balanee of D12 as at 1 January 2020 is 340 units, and for D11 is 170 units. The main direct material in the manufacture of these two products is part ACC2. Three (3) units of ACC2 is needed for D12, and one (1) unit of ACC 2 is needed for D11. The company purchases part ACC2 from an external supplier at $75 per unit. There are no inventory for ACC2 as at 1 January 2020 . The desired ending stock balance for ACC2 is 946 units. The direct labour requirements and rates are given below