The estimated salesfor the next four months are as follows:

Month Units sold

July 24,000

August 28,000

September 22,000

October 24,000

Half of the direct materials required for each month's production are purchased a month in advance. The remaining is purchased within the month of production.

60% of the goods for each months sales are produced one month in advance, and the production for the remaining sales is carried out within the month of sale. The direct material cost per unit is 4.50 per unit (0.75 kg @ 6 per kg).

Being a newly appointed management accountant, you are assigned with preparing the relevant monthly and quarterly budgets.

REQUIRED:

(i) Prepare the production budget in units for July, August and September.

[3 marks]

(ii) Prepare the materials cost budget for August.