uestion 3 production of Koleko for sale. The company has been o years and as such expects the following levels of sales for the next six otal sales for each month for the first three months is 15,000 in units remaining months. Due to recent increase in demand for the t 50 per unit in the first four months and Crystal Ltd. is a business that deals in in this item for the past two and Crystal Lid is a business that deals in tiepowing levels ofsales 1s,00 in units and 24,000 units each month for the months product, management believes it can sell the product a increase it further by 10% thereafter The firm's cost of production for a unit of item is as followings Direct material Direct labour Production overheads 10 Wages will be paid for as they are incurred whereas production overheads incurred are paid for a month later. Suppliers allow for a month's credit for 50% of each month's purchases. Customers are expected to pay goods sold to them on the following terms: 40% in the month of sales, 30% in the following month and the remaining in the subsequent month. The inventory policy of the firm in relation to finished goods and inputs are as followings: The stock of finished goods at the end of each month is 15% of planned sales for that month whereas that of input is 10% of planned input usage of the following month It may be assumed that sales are evenly spread throughout the month and that depreciation expense of two cedis per unit is included in production overheads Required Produce for each month for the first six months: 1. Sales budget; 2. The production budget; 3. The cash budget. Total: 30 marks