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10. Following details were obtained from the factory that produces bottles of vitamins: Factory currently produces 5,000 bottles of vitamins (April 2022). Due to
10. Following details were obtained from the factory that produces bottles of vitamins: Factory currently produces 5,000 bottles of vitamins (April 2022). Due to the increasing demand from the athletes, the production is expected to be 6,000 bottles of vitamins (May 2022), 7,500 bottles of vitamins (June 2022), 8,000 bottles of vitamins (July 2022) & 10,000 bottles of vitamins (August 2022). Factory also currently sells 5,000 bottles of vitamins. Due to the increasing demand from the athletes, the sales is expected to be 6,000 bottles of vitamins (May 2022), 7,500 bottles of vitamins (June 2022), 8,000 bottles of vitamins (July 2022) & 10,000 bottles of vitamins (August 2022). All sales are made on credit basis whereby collection are made based on 70% in the month of sales and remaining in the month after sales The factory is estimated to use 5 litre of nutrition liquid for every bottle it produces. Due to the increased production, the factory is estimated to have ending inventory of material (nutrition liquid) equivalent to 20% of the followings month's material (nutrition liquid) usage requirement. All materials (nutrition liquid) will be purchased on credit at @ RM30 per litre of nutrition liquid. The suppliers are estimated to be paid in the month of purchase. The factory is also estimated to use 3 hours of direct labour to produce 1 bottle of vitamins. Direct labours are expected to be paid at the rate of RM50 per hour. Direct labours are usually paid on 7th of the following month. SELLING PRICE PER UNIT $200 Required: a. Prepare a sales budget for May, June and July (including the collection from customers during these 3 months). b. Prepare a direct material budget for May and June (including the payments to suppliers during these 2 months).
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