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In steps Budgeting XY Ltd plans to sell the following: Months June July August...

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Accounting

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In steps

Budgeting XY Ltd plans to sell the following: Months June July August September October Product A (units) 1200 1800 2800 3200 3200 Stock of finished goods at 1 June was 240 units andthe company's stockholding policy for the finished goods stock at the end ofeach monthto represent 20% ofthe following month's sales requirement. Each unit of product A uses two units of a component X1. On 1 June there were expected to be 264 units ofXi in stock. The desired closing stock of X1 is 10% of the next month's production Each unit ofcomponent X1 costs $5. Each unit ofproduct Arequires S6 of labor. Fixed administration overheads in each month are budgeted to be $5000 (andinclude a charge of $1000 depreciation). Product A can be sold for $26each Labor and fixedoverheads are paid in the same month. Trade receivables (tra de debtors) take two months to pay and the company pays its tradepayables (trade creditors) after one month The opening cashbalanceis $10000. Required: 1. The production budget in units for June July and August 2. The production cost budget for June July and August 3. The raw material purchase budget (in units and $) for June, July and august

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