Smart Manufacturers

As a result of the COVID pandemic Smart Manufacturers has identified an opportunity where the company produces sanitizing hand towels mainly for the healthcare industry.

Actual information for the year ended $31$ July $2019$:

$1.$

Sales for the year amounted to $130000$ at R$50$ per towel.

$2.$

$120000$ towels were manufactured during the year.

$3.$

Direct materials consumed was $60$ cm per towel.

$4.$

Direct material was purchased at R$15$ per meter.

$5.$

Direct labour amounted to $21000$ hours at R$30$ per hour.

$6.$

Manufacturing overheads were R$1500000.$

$7.$

Closing inventory on $31$ July $2019$: Direct material, $5000$ meters.

Finished products, $21000$ hand towels Budgeted information for year ended $31$ July $2020$:

$1.$

Expected increases: Hand towel sales will increase by $20\%.$ The selling price will increase by $5\%.$

Manufacturing overheads will increase by $15\%.$

$2.$

Direct material will be consumed at the same amount and price.

$3.$

According to a new labour agreement, direct labour will be R$33$ per hour.

$4.$

Production time will be $10\%$ less than the $2019$ financial year.

$6.$

Closing inventory on $31$ July $2020$: Direct material, $6000$ meters.

Finished products, $14000$ hand towels

Source: Waka, L$.2023.$

Prepare the following budgets for Smart Manufacturers for the year ending $31$ July $2020$:

$($a$)$

Sales budget $(5$ Marks$)$

$($b$)$

Production budget $(4$ Marks$)$

$($c$)$

Direct material usage budget $(5$ Marks$)$

$($d$)$

Direct material purchases budget $(6$ Marks$)$