The company is preparing budgets for its second quarter ending June 30th. Budgeted sales for the next 4 months are as follows:

april	25,000 units
may	32,000 units
june	28,000 units
july	30,000 units

Considerations:

• - All Sales are on account.

• - All employees will be paid for 40 hours of work each week.

• - Direct labor force will be paid for a minimum of 1,500 hours per month.

• - Manufacturing overhead is applied to units of product on the basis of direct labor hours.

• - Fixed manufacturing overhead is AED 48,000 per month, which includes AED 18,000 of

  noncash costs.

• - Variable selling and admin expenses are AED 0.5 per unit sold.

• - Fixed selling and admin expenses are AED 65,000 per month, which include AED 15,000 of

  noncash costs.

• - Cash collection pattern is:

  65% collected in the month of sale

  35% collected in the month following sale

• - Raw Material Cash Disbursement:

  o 50% of a month purchase is paid for in the month of purchase

  o 50% of a month purchase is paid in the following month

• - 2nd quarter started with:

  o SellingpriceisAED12perunit. o Account receivable balance is AED 25,500. o AED 10,000 amount is payable toward Raw Material. o 11,000 lbs of raw material. o 3500 units on hand. o Cash balance is AED 38,000.

• o Units: 22% of the following month units should be in inventory. o Raw Material: 8% of the following months production should be on hand at the end of

  each month.

• - 4.0 lbs are required per produced unit.

• - lb costs AED 0.35.

• - Each unit requires 0.05 hours (3 minutes) of direct labor.

• - Each worker is paid at the rate of AED 9.6 per hour regardless of the hours worked.

• - The variable manufacturing overhead rate is AED 18 per direct labor hour.

• - Cash Balance:

• day of the month. o AED 45,000 were paid as cash dividend in April. o AED 140,300 and AED 115,000 were paid toward equipment in May and June

  respectively. - Prior preparing its budgeted financial statements, the following account balances are

  reported: o Land AED 55,000.

  o Common stock AED 198,000. o Retained earnings AED 156,250 (April 1st) o Equipment AED 181,000

  Required:

• a) Prepare Direct Labor Budget

• b) Prepare a Manufacturing Overhead Budget.

• c) Prepare Ending Finished Goods Inventory Budget.

• d) Prepare a Selling and Admin Expenses Budget.

• o 15% are maintained open line of credit for AED 50,000. o AED 28,000 are maintained as minimum cash balance. o Borrows are on the first day of the month and loans repayments are on the last

- Required ending inventory: