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Assignment:
Using the following information, create the following budgets for January, February and March: the production budget, the direct materials budget, the direct labour budget and the overhead budget for Williams lnc., a Calgary-based motor vehicle wheel manufacturer for its new XLR tire. The marketing department thinks that it will have strong sales. it usually keeps 20% of the next quarter's sales as a target ending inventory. For new products, Williams Inc. requires a target ending inventory of 30% of the next quarter's sales. Unfortunately, they were unable to manufacture any units before the end of the current year.
Jan. Feb. March April
20000 30000 45000 25000
If Williams lnc.uses14 kg of direct materials (rubber and metal) for each wheel it manufactures at a total cost of $5.00. It pays a total of $2200 in labour wages per hour among 100 employees. It takes 30 minutes of total labour time to produce one wheel. Overhead costs are $5 for direct materials for each labour hour per month. It pays $12,000 per month in rent and insurance.
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