Alya Sdn Bhd. manufactures and supplies granite pots and pans with glass lids to a company in Japan. The new manager, Rushdi, wants to monitor the quarterly budgets for the quarter ending 30th September 2021 to ensure the sales targeted can be executed as planned even with the current economic condition. The following information is available:
Budgeted sales:
|
POTS
60,000 units @RM100 each
|
PANS
40,000 units @RM125 each
|
Budgeted inventories:
|
|
Beginning
|
Ending
|
Pots
Pans
Direct material (Granite)
Direct material (Glass)
Direct material (Handles)
|
20,000
8,000
32,000 kg
29,000 kg
6,000 units
|
25,000
10,000
36,000 kg
32,000 kg
7,000 units
|
Standard variable costs:
Variable manufacturing overhead cost is RM384,000, while fixed factory overhead is RM214,000 per quarter (including the non-cash expenditure of RM156,000) and is allocated on total units produced.
Financial information follows:
• Beginning cash balance is RM1,800,000
• Sales are on credit and are collected 50 percent in the current period and the remainder in the next period. Last quarter’s sales were RM8,400,000. There are no bad debts.
• Purchases of direct materials and labor costs are paid for in the quarter acquired.
• Manufacturing overhead expenses are paid in the quarter incurred.
• Selling and administrative expenses are all fixed and are paid in the quarter incurred. They are budgeted at RM340,000 per quarter, including RM90,000 of depreciation.
Required:
For the quarter ending 30th September 2021, prepare the following:
a) Sales budget.
b) Production budget in units.
c) Direct materials usage and purchase budget (Granite, Glass & Handles).
d) Direct labor budget.