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Olympia Company manufactures tires for fitness bicycles. The tires sell for RM 5 0 each. Olympia is planning its manufacturing operations for 2 0 2

Olympia Company manufactures tires for fitness bicycles. The tires sell for RM50 each. Olympia is planning its manufacturing operations for 2024 by developing a master budget. Toyo Company statement of financial position for 31 December 2023 is as below:
Olympia Company
Statement of Financial Position as at 31 December 2023
RM RM
Non-Current Assets
Property, Plant and Equipment 175,000
Less: Accumulated Depreciation (57,000)118,000
Current Assets
Cash 25,657
Accounts Receivable 25,000
Raw Materials Inventory 3,000
Finished Goods Inventory 5,80059,457
Total Assets 177,457
Current Liabilities
Accounts Payable 5,000
Stockholders Equity
Common Stock 125,000
Retained Earnings 47,457172,457
Total Liabilities & Stockholders Equity 177,457
The relevant budget data for Olympia Company in 2024 are as follows:
1. Budgeted sales are 900 tires for the first quarter and is expected to increase by 100 tires per quarter. Cash sales are expected to be 30% of total sales, with the remaining 70% sales on account.
2. Finished goods inventory on 31 December 2023 consists of 200 tires at RM29 each.
3. Desired ending finished goods inventory is 40% of the next quarters sales volume; first quarter sales volume for 2025 are expected at 1,300 tires.
4. Each unit of tire would require: 1 kg of material at RM15/kg.
5. Desired ending raw materials inventory is 20% of the next quarters direct materials needed for production; desired ending inventory for December 2023 and 2024 is 200kg; indirect materials are insignificant and will not be considered for budgeting purposes.
6. Each tire requires 0.20 hours of direct labour; direct labour costs averages at RM18 per hour.
7. Variable manufacturing overhead is RM2 per tire.
8. Fixed manufacturing overhead includes RM3,000 per quarter in depreciation and RM4,232 per quarter for insurance.
9. Fixed selling and administrative expenses include RM9,000 per quarter for salaries; RM3,000 per quarter for rent; RM600 per quarter for insurance; and RM500 per quarter for depreciation.
10. Variable selling and administrative expenses sales commission is at 1% of each quarters sales value.
11. Capital expenditures include RM20,000 for a new manufacturing equipment, to be purchased and paid in the first quarter.
12. Cash receipt for sales on account are 50% in the quarter of the sale and 50% in the quarter following the sale. The accounts receivable for December 2023 are received in the first quarter of 2024. The uncollectible accounts are considered insignificant and not considered for budgeting purposes.
13. Direct materials purchases are paid for at 75% in the quarter purchased and 25% in the following quarter. The accounts payable for December 2023 are paid in the first quarter of 2024.
14. Direct labour, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred.
15. Income tax expense is projected at RM2,000 per quarter and is paid in the quarter incurred.
16. Olympia Company desires to maintain a minimum cash balance of RM20,000 and borrows from the local bank as needed. Interest is charged on loans at 12% per year and will be paid immediately (upon available cash at the beginning of a quarter) based on the amount outstanding from the previous quarter.
Required: Prepare the following budgets for each Quarter and in Total for the year 2024.
a) Sales Budget
b) Production Budget
c) Direct Material Budget
d) Direct Labour Budget
e) Manufacturing Overhead Budget
f) Selling & Administrative Budget
g) Schedule of Expected Cash Collection
h) Schedule of Expected Cash Disbursement
i) Cash Budget
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