TMG Company is in the process of preparing their master budget for 2021. The marketing department forecasts that the company will sell a total of 50,000 baseball gloves during 2021. Half of these gloves will be sold for $250 per glove, which is the regular selling price. During off-season periods, management typically holds several sales promotions. Accordingly, it is forecasted that the remaining half of these gloves will be sold at a reduced price of $190 per glove. Regarding some long-range planning, the marketing department forecasts 70,000 baseball gloves to be sold in 2022.

At January 1, 2021 management expects to have 5,500 gloves in inventory costing $742,500. Management desires to have 15% of the following years sales quantity in inventory at December 31, 2021 as a precaution against stock-outs.

The primary material used for the manufacture of a baseball glove is leather. Each glove produced requires 3 pounds of leather. The current cost of leather is $20 per pound and is expected to remain unchanged for all of 2021 and 2022. As at January 1, 2021 management expects to have 24,000 pounds of leather in inventory. Management desires to have 10% of the following years leather production needs in inventory at December 31, 2021 as a precaution against leather stock-out risk.

Each baseball glove requires 5 hours of direct labour time to cut and sew the leather into a finished glove. The current wage rate negotiated with the labour union is $12 per labour hour and the labour contract will remain in effect until 2023. The labour contract also requires overtime to be paid at 1.5 times the regular hourly rate for all hours in excess of an annual total of 220,000 direct labour hours.

The company applies manufacturing overhead to the products at a rate of $7 per direct labour hour.

Question 1: Prepare the Sales Budget for 2021

Question 2: Prepare the Production Budget for baseball gloves for 2021.

Question 3: Prepare the Direct Labour Budget (in hours and cost) for 2021.