Woodruff Manufacturing produces a part used in the production of jet-boat engines. The following information is gathered from the company records for preparing budgets for the 2ndQuarter ending 30 June 2021.

(1)	Selected general ledger balances on 1 April 2021
	Cash	$16,500
	Finished goods inventory (600 units)	$42,000
	Direct materials inventory (1200kgs)	$7,200
	Accountants receivable	$64,800
(2)	All sales are credit sales. Actual and projected sales from March 2021 to July 2021 are:
	March (actual)	900 units	@180 =	$162,000
	April (estimated)	800 units	@180 =	$144,000
	May (estimated)	1,000 units	@180 =	$180,000
	June (estimated)	1,200 units	@180 =	$216,000
	July (estimated)	1,400 units	@180 =	$252,000
(3)	The desired ending finished goods inventory for each month is 75% of the next month's sales. The desired direct materials ending inventory equivalent to 50% of next month's sales requirement.
(4)	Variable product cost per unit
	Direct materials(Metal): 3kg @ 8 per kg	$24.00
	Labour: 3 hours @ $15 per labour hour	$45.00
	Variable overhead	$5.00	$74.00
(5)	Monthly fixed costs
	Manufacturing (including depreciation $16,000)	$40,000
	Administrative and selling	$32,000
(6)	Cash collections and disbursements
	The accountant projects 60% of the cash is collected in the month of sale and the balance is collected in the month following sale.
	All material purchases and other expenses are paid in the month in which they are incurred. (a) Prepare production budgets in units for April, May and June, 2021. (b) Prepare direct materials purchases budgets in kilograms and dollars for April, May and June, 2021. (c) Prepare a cash budget for April, May and June, 2021. d) Participation in the budget process is often viewed as way to improve the accuracy of the targets as well as encouraging managers to take responsibility for achieving the targets. Briefly explain any potential negative effects that may accrue from this process.