2:04 AM Sat 9 Dec. Lecture 7: Master Budgeting Tt ! ! Question 2 Company planned its production activity and following production units of table determined: June 3,000 July 5.000 August 4,000 September 6,000 Each unit above would require 5 kg of wood material. The factory intends to ending inventory of direct material equivalent to 25% of the following month's wood material usage requirement. All materials are to be purchased cost of $3 per kg till June. It is also expected that material cost will increase to 3.50 from July onwards due to global price increase. All materials are purchased on credit and suppliers are paid in the month after purchased Direct labour required per unit is 2 hours and direct labour are paid at the rate of $5 per hour. It was decided that direct labour rate will increase by 20% from August onwards with the required direct labour hour per unit increase to 2.5 hours. All direct labours are paid in the following month. Required: a. Prepare a direct material budget for July and August 2018 (including the payments to suppliers during these 2 months). Show workings for payments to suppliers. b. Prepare a direct labour budget for July and August 2018 (including the payments to suppliers during these 2 months). Show workings for payments to suppliers. 61% 0