Winners Ltd produces and sells a fishing trophy made from wood and plastic. Management are about to prepare the functional budgets for the four-month period ending 31 August 200X. The budget factor was known to be sales volume and a provisional sales budget had been prepared a month ago by the Sales Director, Mrs Angry. Unfortunately following a dispute with the company Mrs Angry resigned and took all her working papers with her, including the sales budget. Mrs Angry's assistant can remember that total budgeted revenue for the four month period was $240,000 and that sales are at a constant level per month throughout the calendar year except for both June and July, when they are expected to be twice the usual monthly figure. The selling price for the trophy was also set by Mrs Angry, but she did not disclose this to her fellow board members. All the assistant could remember was that it was calculated by applying a 66-3% mark-up on prime cost. Prime cost had been static for quite a while and would be the same during the budget period. The production manager supplied the board with the following data for the manufacture of one trophy: Materials: Wood Plastic 6 grams at 50 per gram 3 grams at 60 per gram Labour: Moulders 2 hours at $1.60 per hour Finishers 1 hour at $4.00 per hour Variable overheads are incurred at a rate of $1.30 per labour hour and fixed costs for the four month period are expected to be $40,000. The inventory holding policy of the company will be to maintain closing inventory of finished goods equal to 10% of the following month's sales quantity and raw materials equal to 20% of the requirement for the following month's production. Opening inventory levels as at 1 May 200X are expected to be: Finished trophies Wood Plastic 150 2,500 1,000 units grams grams Finished goods are to be valued on a marginal costing basis and the cost per unit used should be the same for both opening and closing inventory valuations. Required: (a) Prepare the following monthly functional budgets for Winners Ltd for the period from May to August: (i) (ii) (iii) sales volume (no. of units) and sales revenue (S); (6 marks) production (no. of units) and raw material purchases (grams and $); (7 marks) labour utilisation (hours and $). (3 marks) (b) Prepare a budgeted income statement for the period of four months ending August 200X, detailing all opening and closing inventory. (7 marks) (23 marks)