Exercise ONE:

Caf shop, which expects to start operations on January 1, 2020, will sell coffee in ABC shopping mall. The Caf shop has budgeted sales for January 3000 cups and the Caf shop expects a 15 percent increase in sales per month for February and March. The selling price is RM10 per cup.

Required

1. Complete the sales budget for the first quarter?
2. Prepare production budget for the first quarter if the companys policy is to have 0% ending inventory?

Exercise TWO:

Silk house SDN BHD manufactures silk scarfs and is planning to sale 4,000 scarfs in April; 3,700 in May and, 3,500 in June. The companys policy is to maintain a finished goods inventory equal to 10% of the next months sales. Assume finished goods inventory at the end of June is estimated to be 300 scarfs. In addition Silk scarf requires one meter of silk.

1. Prepare the production budget (April; May and June)?
2. Prepare the raw material budget for quarter 2 (April; May and June)?