Unicorn Sdn
Subject:AccountingPrice:8.89 Bought3
Unicorn Sdn. Bhd. manufacture single product. The management accountant is preparing quarterly budgets for year 2015. The following information is available:
1) The sales volume is forecast to be 10,000 units for January. This is expected to grow by 200 units a month. The selling price is RM2.00 per unit.
2) The firm's inventory policy is to hold enough units of finished goods at the end of each month to cover 40 per cent of the forecast sales for the next month. Each unit of finished goods requires 3kg of raw material, which costs RM0.15 per kg, and 0.1 hours of direct labour, which costs RM7.50 per hour. The opening finished goods inventory at the start of January is forecast to be 3,000 units.
3) The company's inventory policy is to hold enough raw material at the end of each month to meet 30 per cent of the forecast production for the following month. The opening raw material inventory in January is forecast to be 11,000kg.
Required:
Using the information given, you as an assistant of management accountant is required to prepare budgets for the month of January, February and March 2015 for:
(i) sales budget
(ii) production budget
(iii) material budget
(iv) labour budget.
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Unicorn Sdn. Bhd.
i Sales Budget January February March Total
Sales in Unit 10,000 10,200 10,400 30,600
Sales Price 2.00 2.00 2.00 2.00
Sales in Dollars 20,000.00 20,400.00 20,800.00 61,200.00
ii Production Budget January February March Total April May
Sales in Units 10,000 10,200 10,400 30,600 10,600 10,800
End, FG Inv 4,080 4,160 4,240 4,240 4,320
-Beg, FG Inv 3,000 4,080 4,160 3,000 4,240
Units to Produce 11,080 10,280 10,480 31,840 10,680
iii Raw Materials Budget January February March Total
Units to Produce 11,080 10,280 10,480 31,840 10,680
Required Materials per unit 3 3 3 3 3
Total Required Materials (in ft) 33,240 30,840 31,440 95,520 32,040
End, RM Inv 9,252 9,432 9,612 9,612
-Beg, RM Inv 11,000 9,252 9,432 11,000
Materials to Purchase in kg 31,492 31,020 31,620 94,132
Cost of RM per kg. 0.15 0.15 0.15 0.15
Total Cost of Materials to Purchase 4,723.80 4,653.00 4,743.00 14,119.80
iv Labour Budget January February March Total
Units to Produce 11,080 10,280 10,480 31,840
Required DL Hours per unit 0.10 0.10 0.10 0.10
Total Required DL Hours 1,108 1,028 1,048 3,184
Cost of DL per hour 7.50 7.50 7.50 7.50
Total Cost of Direct Labor 8,310.00 7,710.00 7,860.00 23,880.00
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