QUESTION 2 (25 MARKS)

i. State FIVE (5) purposes of preparing a budget.

(5 marks)

ii. Computer Solution Sdn Bhd manufactures 2 types of product which are known as CS Desktop and CS Notebook. The company uses similar types of materials to make computer keyboard which are Acrylonitrile Butadiene Styrene (ABS) and a printed circuit board (PCB). The followings are the detailed information about the budgeted data for the month of January 2022:

1. Standard usage of material for one unit of product:

CS DesktopCS NotebookCost per kgABS0.5 kg0.3 kgRM40.00PCB0.4 kg0.2 kgRM30.00

2. The company employs two groups of labour where skilled labour will be paid at RM6.00 per hour and semi-skilled labour will be paid at RM4.00 per hour. The required labour hours for each product are as follows:

Skilled labourSemi-skilled labour

CS Desktop3 hours per unit4 hours per unit CS Notebook 2 hours per unit3 hours per units

3. Cost of inventories of material ABS and PCB are as follows:

Opening inventoriesClosing inventories

ABSRM8,000 RM12,000 PCBRM10,500RM12,000

4. Inventories of finished goods are as follows:

Opening inventoriesClosing inventories

CS Desktop100 units250 units

CS Notebook 250 units150 units

5. The budgeted sales volume of CS Desktop and CS Notebook for January 2022 are 1,500 units and 3,000 units respectively. The selling price is RM950 per unit for CS Desktop and RM1,200 per unit for CS Notebook.

Required:

Prepare the following functional budget for January 2022:

i. Sales budget

ii. Production budget

iii. Material usage budget

iv. Material purchase budget

v. Direct labour cost budget

(20 marks)