Stage 1 The first task in stage 1 is to prepare the 2022 budgets, Eric provides the following information per your instruction. Components and Labour Requirements per unit of Laser Pointer Outer casing 1 unit Circuitry board 1 set Packaging kit 1 kit Labour | 1.5 hours Price information 2022 (Budgeted) 2021 $50 per unit $50 per unit $45 per set $45 per unit $5 per kit $5 per kit $80 per hour $80 per hour Management of the company forecast the sales of 400,000 units at selling price of $300 per unit in 2022. The management also plan to maintain quarter-end FG inventories as 10% of the units sale in the next quarter. Quarters (in unit) Year 2022 2023 Q2 Q3 Q4 Full Year Sales 90,000 90,000 120,000 100,000 400,000 100,000 Target Ending Inventories: - Outer casing (unit) 18,000 18,000 18,000 18,000 - Circuitry board (set) 13,000 13,000 13,000 13,000 Q1 Q1 Budgeted beginning inventory at 1 Jan 2022 Finished goods 7,000 units Direct materials Outer casing 15,000 units - Circuitry board 12,000 sets - Packaging kit JIT per unit Indirect costs, consisting of manufacturing and non-manufacturing overheads are budgeted for 2022 as follows: Cost Budgeted cost Manufacturing overheads per year Variables $30 $12,090,000 - Fixed 4,836,000 Variable manufacturing overhead is assumed related to direct labour activity at 403,000 units output level. It estimates that it takes 1.5 labour hours per eetunl output unit. Therefore, variable overhead $20 is allocated per direct labour hour (S12,090,000 / (403,000 X 1.5 hours). $30 is budgeted for variable overhead allocation per output unit (1.e. $20 X 1.5 hours) ** Fixed overhead is allocated to the output based on direct labour hours. Each output (pack) requires 1.5 direct labour hours at budgeted output level of 403,000 units. Cost Budgeted cost Non-manufacturing overheads per year - Variable: Sales commission 2% on sales - Fixed: Marketing consulting fee $2,000,000 per unit Other additional information: Direct materials inventory and finished-goods inventory are costed by using first-in, first-out (FIFO) method. Assuming the carrying value of the 7.000 units of beginning finished goods (FG) was $1,491,000. Work in process is insignificant and can be ignored. Task 1: Your team would give the following operating budgets to the management. 1. Revenue budget in Dollars, 2. Revenue budget in Units. 3. Material usage and purchases budgets. 4. Direct manufacturing labor costs budget. 5. Direct manufacturing overhead costs budget. 6. Show him the budgeted manufacturing overhead cost per output unit. 7. Show him the unit cost of LP-100 manufactured in 2022. 8. Ending inventory budget for both direct materials and finished goods as at 31 Dec 2022. 9. Cost of goods sold budget for the year ending 31 December 2022 10. Budgeted operating income statement for EdTech for the year ending 31 December 2022
