Xylia Ceramics makes and sells decorated vases for flower arrangements. As part of the master budget, following information is available for 2024: January February March April May June Estimated Sales 20,000 21,000 18,000 17,000 21,000 22,000 Sale Price $50.50 $53.00 $55.50 $55.50 $56.00 $60.00 Direct Manufacturing Labour Hour (DMLH) per unit 1.30 1.40 1.50 1.60 1.30 1.40 Wage per DMLH $20.50 $21.00 $21.00 $21.00 $22.50 $22.50 Cost of Materials $17.00 $16.00 $17.50 $19.00 $22.00 $23.00 XylixZa Ceramics expects to have 10,500 vases on hand at 31 December 2023, and it has a policy of carrying an end-of-month inventory of 60% of the following month's sales. July 2024 sales are expected to be 23,000 vases.

Required:

1. Prepare a sales budget, production budget and a direct manufacturing labour budget for Xylia Ceramics month-by-month for the first 6 months of 2024. The direct manufacturing labour budget should include labour-hours and total cost. [15 marks]

2. Provide 3 recommendations to Xylia Ceramics to assist with improved profitability and explain how they will be successful.