Azuranna Ltd manufactures and sells two products: Azu and Anna. In September 2017, Azuranna Ltd’s budget department gathered the following data to prepare the budgets for 2018: 2018 Projected sales
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Get Help Now!| Product | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 |
| Azu | 6 000 | 7 000 | 8 000 | 9 000 |
| Ranna | 5 000 | 5 500 | 6 200 | 6 800 |
| Selling price per unit | ||||
| Azu | $125 | $125 | $135 | $135 |
| Ranna | $160 | $160 | $170 | $170 |
2018 Inventories in units
| Expected target | ||
| Product | 1 January 2018 | 31 December 2018 |
| Azu | 4 000 | 5 500 |
| Ranna | 3 000 | 4 500 |
The following direct materials are used in the two products:
| Amount used per unit | |||
| Direct material | Unit usage | Azu | Ranna |
| A | Kilogram | 4 | 5 |
| B | Kilogram | 2 | 3 |
| C | Each | 0 | 1 |
Projected data for 2018 with respect to direct materials are as follows:
| Direct material | Anticipated purchase price | Expected inventories 1 January 2018 | Target inventories 31 December 2018 |
| A | $8 per kg | 23 000 kg | 25 500 kg |
| B | $4.25 per kg | 1 900 kg | 1 800 kg |
| C | $2.80 per unit | 4 000 units | 4 600 units |
Projected direct manufacturing labour requirements and rates for 2018 are as follows:
Product
| Hours per unit | Rate per hour | |
| Azu | 2 hours 15 minutes | $14.55 |
| Ranna | 3 hours 30 minutes | $16.75 |
Manufacturing overhead is allocated at the rate of $15 per direct manufacturing labour-hour. Assume the following in your answer:
Direct materials inventory and finished goods inventory are costed using the FIFO method.
There is no work-in-progress inventory at any given point in time.
REQUIRED: Use two decimal places in calculations when appropriate and do not round calculations up to the nearest dollar.
Where appropriate, show two decimal places in your calculations.
A. Design one input and the six output sheets as required in B below. Ensure your spreadsheets meet the “design of spreadsheets” and “formatting” requirements as stated above, otherwise you will lose up to five (5) marks.
B. Prepare the following six (6) budgets for 2018: Where appropriate, show the budgets of the two products in separate columns.
Ensure you show the figures that will be shown in the budgeted Income Statement at the bottom of each relevant worksheet and that these figures are rounded to the nearest dollar.
1. Sales budget (show the figures for each quarter and the total for the year in separate columns)
2. Production budget (in units).
3. Direct material purchases budget (in kilograms for materials A and B and in units for material C). Show the calculations of the three materials in separate columns and the production needs of the two products in separate rows.
4. Direct materials purchases budget (in dollars). Show the calculations of the purchases of the three materials separately.
5. Direct manufacturing labour budget (in hours and in dollars for each product). Show the budgeted production units, direct manufacturing labour hours and cost per unit. 6. Budgeted finished goods inventory as at 31 December 2018 (in dollars). Show the unit cost of each cost component and of each direct material separately using two decimal places
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