Stackit Ltd. manufactures three sizes of wooden bookcases. The information relating to the production of the three bookcases for next year is as follows: Selling Price Cost of wood Direct labour Anticipated sales volume (units) Small Opening inventories of Finished goods (units) 90 Medium Deluxe 2000 180 14 15 (1 hours) 45 (3 hours) 90 (6 hours) 16 22 33 50 28 Other variable costs Product related fixed costs 10,000 15,000 25,000 250 1000 100 60 3000 80 Other Fixed Costs which are not product related for the year are 250,000 Labour costs per hour are 15. No inventories (stocks) of wood (raw material) are kept as a local supplier delivers it within a few hours. Closing finished goods inventories (stock) is estimated to be 10% higher than the opening. There is currently a shortage of labour to produce the bookcases next year. Labour hours are limited to 22,500 hours for next year. A foreign supplier is willing to supply the small bookcases if Stackit cannot meet demand; the subcontract cost of buying in the small bookcase is 75. Required i) Prepare the following: a) Sales budget in units and value for individual products and the business as a whole. (2 marks) b) The quantity of bookcases that are needed to satisfy sales demand and reflect the change in stock levels. c) Direct labour hours budget in hours and cost. (5 marks) (4 marks) d) The number and cost of small bookcases that need to be purchased from the foreign supplier in order to overcome the shortage of labour. (3 marks) ii) e) Raw material (wood) purchase budget for the in-house produced bookcases. Briefly outline why most organisations prepare financial budgets. (3 marks) (8 marks)