The Caribbean Industrial Producers manufactures two products, Zinc and Ply. The following sales forecast for 2016 was decided on by the budget committee and presented to you the management accountant.

Sales forecast

Details	Zinc/units	Ply /units
December 2015	6,000	3,700
January 2016	5,500	4,000
February 2016	6,200	4,500
March 2016	5,000	5,200
April 2016	4,900	5,400
May 2016	6,400	4,800

Notes:

(i) During 2016 the company sold one unit of Zinc for $1,200 while one unit of Ply was sold for $$1,500.

(ii) To make one unit of Zinc four units of raw material BZN980 are used, while two units of raw material CZN980 are used to produce one unit of Ply. .

(iii) Raw materials stock in units at the end of each month is to be held at a level equal to twenty percent (20%) of the forecasted sales for the next month.

(iv) It was decided by management that at the end of each month there should be enough finished goods stock on hand to meet fifteen (15%) of the sales for the next month.

(v) During 2016, direct raw material charge per unit was budgeted at ten percent (10%) of the unit selling price of the finished products.

Required:

For the period, January 2016 to April 2016 do the following:

1. The companys sale budget.
2. The production budget for both products.
3. The direct raw materials usage budget for both products.
4. The direct raw materials purchases budget.
5. Outline four advantages that can be derived from proper budgeting practices within an organization.
6. Briefly explain, using two examples what is meant by a limiting budget factor