Bullen & Company makes and sells upmarket carrybags for laptop computers. John Crane is responsible for preparing Bullen & Company’s master budget and has assembled the data below for 2021.
The direct labour rate includes wages, all employee-related benefits and the employer’s share of payroll tax. Labour-saving machinery will be fully operational by March. Also, as of 1 March, the company’s enterprise agreement calls for an increase in direct labour wages; this has been included in the direct labour rate.
Bullen & Company expects to have 10000 bags in inventory at 31 December 2020 and has a policy of holding 50 per cent of the following month’s projected sales in inventory.

Required
Prepare the following budgets for Bullen & Company for the first quarter of 2021. Be sure to show supporting calculations.
(a) Production budget
(b) Direct labour budget
(c) Direct materials budget
(d) Sales budget

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Estimated unit sales Sales price per unit Direct labour hours per unit Direct labour hourly rate Direct materials cost per unit January 20000 $80 4.0 $15 $10 2021 February 24 000 $80 4.0 $15 $10 March 16000 $75 3.5 $16 $10 April 18000 $75 3.5 $16 $10