QUESTION 7 BMW Limited manufactures a single product, Tune. The finance director prepares monthly budgets. The following budgeted information is available for the first three months of 2021. (i.) The...

Extracted text: QUESTION 7 BMW Limited manufactures a single product, Tune. The finance director prepares monthly budgets. The following budgeted information is available for the first three months of 2021. (i.) The selling price will be fixed at $60 per unit. In January 2021 sales are expected to be 24 000 units. It is anticipated that there will be a 5% increase in sales volume in every subsequent month up to April 2021. (ii.) The finished goods inventory level at the end of each month will be maintained at one-third of the expected sales volume in the following month. The inventory of finished goods at 31 December 2020 is expected to be 7500 units with a value of $242000. The finished goods inventory value at 31 March 2021 is expected to be $298000. (iii) Each unit of Tune requires 10 kilos of raw material. The closing inventory of raw materials each month is expected to meet 20% of the production requirement of the following month. The inventory of raw materials at 31 December 2020 is expected to be 48000 kilos. The purchase price will remain at $1.50 per kilo. (iv)Direct labor for the first three months of 2021 is expected to be $850000. Manufacturing overhead is expected to be 50% of direct labor. REQUIRED (a) Prepare the sales budget for the period January to March 2021. State the units and revenue for each month. (b) Prepare the production budget for the period January to March 2021. State the units for each month. (c) Prepare the purchases budgets for the period January to March 2021. State the units and cost for each month.