George Ltd manufactures and sells two different types of coils used in electric motors, in September Jessica Martin, the management accountant, compiled the following data for the upcoming annual budget:
Use of direct material:

Raw material prices and inventory levels:

Direct labour requirements and rates:

Manufacturing overhead:
Activity ____________________________________ Cost per unit of activity driver
Martial handing
- Sheet metal and copper wire .................... $0.50 per kg of raw material purchased
- Platforms ............................................................ $0.10 per unit purchased
Machine related ....................................................... $1.50 per machine hour
Shipping ................................................................. $2.00 per coil shipped
General manufacturing overhead ............................... $1.20 per direct labor hour
* Total annual machine hours are 100 000 for light coils and 200 000 heavy coils
Finished goods inventories (in units):

Sales forecast:

Required:
Prepare the following budgets:
1. Sales budget (in dollars).
2. Production budget (in units).
3. Direct material purchases budget (in quantities).
4. Direct material purchases budget (in dollars).
5. Direct labour budget (in dollars).
6. Manufacturing overhead budget (in dollars).

Transcribed Image Text:

Amount used per unit Direct material Light coil Heavy coil | Sheet metal Copper wire 4 kilograms 2 kilograms 5 kilograms 3 kilograms 1 unit Platform Raw material Anticipated purchase price Expected inventories Desired Inventories 31 December 36 000 kilograms 1 January Sheet metal Copper wire 32 000 kilograms 29 000 kilograms 6 000 units $8 32 000 kilograms 7 000 units $5 Platform $3