QUESTION $2$

$(20$ Marks$)$

REQUIRED

Use the information given below to prepare the following budgets for Product Choc and Product Nutty for January $2024.$

$2\mathrm{.}1$ Sales Budget $($units and Rands$)$

$(2$ marks$)$

$2\mathrm{.}2$ Production Budget $($units$)$

$(6$ marks$)$

$2\mathrm{.}3$ Direct Labour Budget $($Rands$)$

$(4$ marks$)$

$2\mathrm{.}4$ Manufacturing Overheads Budget $($Rands$)$

$(2$ marks$)$

$2\mathrm{.}5$ Cost of Sales Budget $($Rands$)$

$(6$ marks$)$

INFORMATION

Snacko Limited manufactures and sells two products viz. Product Choc and Product Nutty. The following information is available to determine the budget requirements for January $2024$ :

Projected sales for January and February $2024$:

$\backslash$table$[[$January$,$February$],[50000$ units of Choc at R$50$ each,$45000$ units of Choc at R$55$ each$],[25000$ units of Nutty at R$100$ each,$20000$ units of Nutty at R$105$ each$]]$

The policy of Snacko Limited is to maintain a closing inventory equal to $40\%$ of the budgeted sales of the following month.

Labour hours required to produce one unit of each product and the rate per hour are as follows:

Choc: $0\mathrm{.}5$ hours at R$10$ per hour

Nutty: $1$ hour at R$13$ per hour

Manufacturing overheads for each product are projected at a rate of $R0\mathrm{.}75$ per labour hour.

The total manufacturing costs per unit $($including the costs above$)$ have been forecasted at R$23$ for Choc and R$53$ for Nutty for December $2023$ as well as January $2024.$