QUESTION 2 Silver Sdn Bhd produces two products namely product D20 and D50 that are sold at RM45 and RM50 per unit. The company is in the process of preparing budgets for quarter 2 and quarter 3 of 2021. The management accountant of the company has gathered the following information for the preparation of the budgets. 1. Budgeted sales in units for the two products for three quarters of 2021 are as follows: Products D20 D50 Quarter 2 60,000 40,000 Quarter 3 75.000 50,000 Quarter 4 70.000 45,000 2. The management at Maluri plans to minimize the probability of a stock out of inventory items. Therefore, the company has determined that the budgeted inventory at the beginning of each quarter is equal to 10% of that quarter budgeted sales. 3. Only material X is used in the production of these products. The raw materials requirement for each unit produced of the two products are shown below: Raw Materials Material X Price per kg RM6 D20 0.2 kg D50 0.4 kg 4. Raw materials inventories for material X at the beginning of quarter 2 and quarter 3 are 8,000kg and 12,000kg respectively. The raw material inventories at the beginning of quarter 4 is expected to reduce by 10% from the previous quarter. 5. The standard time to produce each unit of D20 is 20 minutes and D50 is 30 minutes. Labour are paid at the rate of RM8 per hour worked. 6. Maluri applies production overhead on the basis of direct labor hours. The variable manufacturing overhead rate is RM20 per direct labor hour and the fixed overhead is RM50,000 per month. 7. All sales are in cash and all expenses will be paid in the period they are incurred. The cash balance as at 1 April 2021 was RM520,000. Required: a. Prepare the following budgets of the company for quarter 2 and quarter 3 of 2021 i. Sales budget ii. Production budget (in units). iii. Raw material usage budget (in kg) and raw material purchases budget (in RM). iv. Direct labour cost budget. v. Cash budget