QUESTION 1 (30 MARKS)

City Computer Bhd produces two products namely, Thumb Drive and Mouse.

Planned sales for the year 2017 are as details given below:

Product Units Unit selling price

Thumb Drive 25,000 RM15

Mouse 40,000 RM20

Both the products use two types of direct materials, namely DMX and DMY:

DMX costing RM0.40 per litre.

DMY costing RM0.50 per litre.

Direct materials usages per unit are:

Product DMX DMY

Thumb Drive 2 litres per unit 4 litres per unit

Mouse 3 litres per unit 4 litres per unit

Stocks are estimated to be:

Finished units Direct materials (litres)

Year 2017

Thumb Drive Mouse DMX DMY

Opening 2,000 3,600 12,000 20,000

Closing 2,200 3,000 15,500 22,500

REQUIRED:

(a)Prepare the Sales Budget for Thumb Drive and Mouse and in total (RM).

(7 marks)

(b)Prepare the Production Budget in quantities for Thumb Drive and Mouse.

(8 marks)

(c)Prepare the Direct Materials Usage Budget for DMX and DMY in litres only.

(7 marks)

(d)Prepare the Purchases Budget for direct materials in litres and total value for DMX and DMY.

(8 marks)