Question

Question 2: Basket Company specializes in unique baskets. Peak sales for one of their products, the Easter basket, occur in March every year. The company has estimated the following sales for the first five months of the year for the Easter basket: Month January February March April May Expected sales in units 2,000 3,000 10,000 1,000 5001 Each basket requires 2 meters of plastic. The cost per meter is $2.00. The company wants to ensure it has enough plastic on hand at all times and therefore has indicated that ending inventory will be 10% of the following month's production needs for plastic. The company had 1,080 meters of plastic on hand as at January 1st. The company puts all purchases of plastic on account and pays for it the month following purchase. Purchases of plastic in December amounted to $2,000. Due to the intricate design, the company uses substantially all production line workers to create the baskets. Each basket takes 1.5 hours to produce and the direct labor rate per hour is $12.00. Required: 1. Prepare a production budget for the first three months of the year. 2. a) Create a direct materials budget for the first quarter of the year. b) Create a cash disbursements budget for direct materials for the first quarter of the year. c) What is the accounts payable balance as at March 31st? 3. Create a direct labor budget for the first quarter of the year.

i have got this question and i dont have extra information

Answer 1

1)	As no information regarding "desired ending inventory of finished goods" has been given in the question,
	sales budget and production budget would be same.

2)
a)	Particulars		January	February	March	April	May
	Expected sales		2000	3000	10000	1000	500
	Plastic req. per unit		2	2	2	2	2
	Total production need		4000	6000	20000	2000	1000
Add:	Desired ending stock		600	2000	200	100
Less:	Beginning stock		1080	600	2000	200
	Net Purchase req		3520	7400	18200	1900

b)	Particulars		January	February	March	April
	Net Purchase req		3520	7400	18200	1900
	Cost per meter		$           2.00	$           2.00	$             2.00	$           2.00
	Total cost		$   7,040.00	$ 14,800.00	$   36,400.00	$   3,800.00
	Payment for :
	December		$   2,000.00
	January			$   7,040.00
	February				$   14,800.00
	March					$ 36,400.00

c)

Accounts Payable as at March 31

$ 36,400.00

3)	Direct Labor Budget
	Particulars		January	February	March
	Units to be produced		2000	3000	10000
	Time req. per unit		1.5	1.5	1.5
	Total time required		3000	4500	15000
	Labor rate per hour		$        12.00	$        12.00	$           12.00
	Labor cost		$ 36,000.00	$ 54,000.00	$ 180,000.00