Thirroul Metal Equipment Ltd produces metal filing cabinet. The manager in charge of production has been asked to prepare a production budget, a direct materials budget and a direct labour budget for part of 200A based on the company's sales forecast.
The materials and labour requirements per barbecue are:
	Quantity	Cost
Sheet metal	3 square metres	$24 per square metre
Enamel paint	1 litre	$12 per litre
Cutting and welding labour	3 hours	$16 per hour
Finishing labour	1 hour	$12 per hour
The business requires a finished goods ending inventory for each quarter that equals 20% of expected sales for the next quarter. Also, the ending inventory balance of direct materials should equal 25% of the next quarter's production requirements. The inventory balances on 1 January 200A are forecast as:
	Quantity
Sheet metal	6,200 square metres
Enamel paint	1,200 litres
Barbecues	240 units
The forecast quarterly sales in units are:
	Units
First quarter 200A	12,400
Second quarter 200A	6,200
Third quarter 200A	8,800
Fourth quarter 200A	14,200
Required:
A. Prepare a quarterly production budget, in units only, for the first three quarters of 200A.
B. Prepare a direct materials budget for the first two quarters of 200A in both units a nd dollars.
C. Prepare a direct labour budget for the first two quarters of 200A

asnwer format:

Production and related budgets
THIRROUL METAL EQUIPMENT LTD
Data Section
The forecast quarterly sales in units :				Inventory balances on 1/01/200A
						m2
						litres
						units
The materials and labour requirements per unit produced (barbecues):
	Quantity			Cost
Sheet metal
Enamel paint
Cutting and welding labour
Finishing labour
			%
Finished goods ending inventory for each quarter :				of expected sales for the next quarter
Ending inventory balance of direct materials :				of the next quarter's production requirement
Production and related budgets
THIRROUL METAL EQUIPMENT LTD
Answer to Part A :
THIRROUL METAL EQUIPMENT LTD
Production Budget
for the first three quarters of the year ending 31 December 200A
	First Quarter	Second Quarter	Third Quarter	Total
Forecast sales unit
Answer to Part B :
Direct Materials Budget
for the first two quarters of the year ending 31 December 200A
	First Quarter	Second Quarter	Total
Sheet metal
Enamel Paint
Answer to Part C :
Direct Labour Budget
for the first two quarters of the year ending 31 December 200A
	First Quarter	Second Quarter	Total
Cutting & Welding Labour
Finishing Labour
Total labour cost (a + b)