Direct Material 1: Direct material item name Sugar Quantity required for each unit of product Sugar 1kg Desired ending inventory as a percentage of following months production requirement Sugar 5kg per month Price per unit of direct material 5kg per 2000 Direct Material 2: Direct material item name Milk powder Quantity required for each unit of product 5kg Desired ending inventory as a percentage of following months production requirement 30kg Price per unit of direct material Direct Material 3: Direct material item name Coffee Beans Quantity required for each unit of product 2kg Desired ending inventory as a percentage of following months production requirement 100kg Price per unit of direct material Equipment name Cost Useful Life Depreciation Cost Stove 25000 8 years 15000 Gas 5000 7 years 2000 Equipments 100000 10 years 50000 Fixed MOH Expense Item name Fixed Expense Per Month Sugar 10,000 Milk Powder 10,000 Coffee beans 3,00000 Total selling and administrative (SnA) expense = Variable expenses + fixed expense = 320000 + 130000 = 450000 Month Estimated Units of Product Sold October 100 November 150 December 200 January 250 February 300 March 350 April 400 May 500 June 520 July 550 August 570 September 600 Total Units: 4490 Perunit 5tk 4490*60=269400 Total amount received 269400 end of the year. My investment is 5,00000 Borrowing from my friend 2,00000 Total amount 7,00000 My returns end of the year is 269400 Loss of my business is 269400-700000 = - 430600

Assume all sales will be in cash and you will collect 100% of the revenue. Since you are going to sell a food item, no ending inventory of finished goods will be maintained. Each unit will be manufactured after an order is received. All purchases for all direct materials are made fully in cash. You want to draw a dividend of BDT 20,000 every month as the sole owner of your business. [This is your dividend, you will not use this money for operating your business.] At the end of each month, you want to have at least BDT 50,000 cash available for operating your business. You will start the business with a cash investment of BDT 500,000. You can borrow up to BDT 200,000 from your best friend to invest in your business. You will not repay any borrowed amount, even if you have sufficient cash available, any time during the next year.

Calculate MOH Budget.