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Madani Health Care (MHC) specializes in health-related products. In 2020, the company started producing 3-ply facemasks as there is a massive demand for facemasks during

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Madani Health Care (MHC) specializes in health-related products. In 2020, the company started producing 3-ply facemasks as there is a massive demand for facemasks during the Covid-19 pandemic. The facemasks are sold in boxes of 50 pieces per box to appointed distributors and agents only. However, the operation of facemask production was not well-planned in 2020. Thus, the management expected a proper planning for the facemask production is carried out by the relevant department in 2021. The Sales Department has prepared quarterly plans and the followings are budgeted sales (boxes) for the third and fourth quarter of 2021: Month Quantity (in boxes) July 40,000 August 50,000 September 55,000 October 45,000 November 40,000 December 30,000 Based on last year's sales performance, the Sales Department expects to keep end-of-month inventory levels equal to 10% of the following month's unit sales. The Production Department furnishes the following information to help the Finance Department prepare relevant budgets: i. The standard requirement of material and labour for a piece of facemask are as follows: Item Cost per metre/hour A piece of facemask requirement Non-woven fabric RM0.50 per metre 0.25 metre Labour hour RM5.00 per hour 0.05 hour ii. The Production Department also suggested to always keep end-of-month inventory levels of the non-woven fabric at 10% of the following month production needs to ensure uninterrupted production operation. In addition, as the facemask market is very competitive, MHC plans to pay sales incentive to salespersons of RM2 for each box sold to agents or distributors as incentives for them in closing sale deals. The fixed overhead cost for the selling and administrative operation is expected to be RM5,000 per month. Required: Prepare the following budgets for July, August September and the total for the quarter: a. Production; b. Raw materials (quantity and costs); c. Direct labour (quantity and costs); and d. Selling and administrative

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