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QUESTION 3 (A)Daisy Sdn. Bhd. (DSB) produces two products, which are Product A and Product B. The followings are the budgeted units to be produced
QUESTION 3 (A)Daisy Sdn. Bhd. (DSB) produces two products, which are Product A and Product B. The followings are the budgeted units to be produced by DSB for 2020: July August September October Product A (units) 8,500 8,800 9,200 11,000 Product B(units) 11,600 12,800 14,700 15,100 Total Units 20,100 21,600 23,900 26,100 It takes 4 pounds of direct materials to produce the Product A and 5 pounds of direct materials to produce the Product B. It is the company's policy to maintain an inventory of direct materials on hand at the end of each month equal to 20% of the next month's production needs for the Product A and 25% of the next month's production needs for the Product B. Direct materials inventory on hand at 30 June were 6,000 pounds for the Product A and 10,200 pounds for the Product B. The cost per pound of materials is RM6.5 Standard and RM6 Advanced. Required: Prepare direct materials budgets for each product for the third quarter of 2020. (25 marks)
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