Sanyo Industries is making industrial products.The company has been growing nicely in terms of revenue and its customer base. The Board of Directors of Sanyo Industries has been insisting that they should have one management accountant for their company to achieve better performance in the coming periods.The role of management accountants has been well-known to the corporate world as they widely contribute for performing planning, controlling and decision making functions effectivelyand efficiently through providing solid accounting information with good analysis.

Production and Cost Details

Sanyo Industries manufactures and sells a single product that has following cost and selling price structure:

Information

$ per unit

Selling Price

700

Direct Material

300

(per unit of material)

300

Direct Labour cost

50per hour

300

Number of labour hours needed to manufacture one unit of product

6 hours

Fixed Costs for the company

$ 40,000

Estimations for the next year 2020

The company has estimated the following for the next for one of its products (Beta).

(i) Sales Estimations

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Number of units to be sold (Units)

1000

1100

1200

1300

(ii) Inventory estimations

Inventory

Beginning

(first quarter)

Ending

Finished Goods

200 units

The company desires to have an ending inventory each quarter equal to 25% of the next quarter's sales. The first quarter's sales for the following year (2021) is expected to be 1400 units

Materials

$ 120,000

The company desires the ending balance in materials inventory to be 45% of the next quarter's cost of materials.The cost of materials for the first quarter in the following year (2021) is expected to be $ 170,400

(1) Based on the estimated information given above,prepare

(i) Sales Budget (20 marks)

(ii) Production Budget (20 marks).Use the following format

Production budget

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

Units to be sold

Add: Ending Inventory

275

Total Units needed

Less:Opening inventory

200

Units to be produced

Hint :Closing Inventory (ending) Calculations

Quarter

Calculations

Desired Closing Inventory

First

Second Quarter sales * 25%

1100 x 0.25 =

275

Second

Third

Fourth