Question 4 a) Dudu Berhad's projected sales for the first six months of 2021 are given below: 2021 January February March April May June RM250,000 RM340,000 RM280,000 RM300,000 RM350,000 RM380,000 20% of sales are collected in cash at time of sale, 50% are collected in the month following the sale, and the remaining 30% are collected in the second month following the sale. Cost of goods sold is 55% of sales. Purchases are made in the month prior to the sales, and payments for purchases are made in the month of the sale. Total other cash expenses are RM70,000/month. The company's cash balance as of February 28th 2021 will be RM10,000. Excess cash will be used to retire short-term borrowing (if any). Dudu has no short-term borrowing as of February 28, 2021. Ignore any interest on short-term borrowing. The company must have a minimum cash balance of RM10,000 at the beginning of each month. What is Dudu Berhad's total disbursement in May? Required: a) Prepare the cash budget for March, April and May 2021. (10 Marks) b) Dadam Berhad. is a company selling home camera. It sells the camera for RM120 which costs RM55 each. Last year the company sold 150,000 units. The supplier of the camera which recently announced a price increase of RM6. This will force Dadam Berhad to increase the selling price to RM125 but anticipate that the demand for the camera for this coming year to decline by 15 percent. It costs Dadam Berhad RM300 to place an order and the carrying costs of the deluxe telephone are 15% of costs. The supplier has also indicated that due to increase in processing costs, it will accept orders only in round lots of 100 units at the quoted price of RM45. An additional charge of RM30 per order is made on any fractional order. Required: i. Compute the economic order quantity (EOQ). (1 Mark) ii. Compute the total costs of inventory if the EOQ is ordered. (3 Marks) iii. Compute the total costs of inventory if each order is rounded to the nearest round lot of 100 units. (3 Marks) iv. What order size should the company place? (1 Mark) (Total: 18 Marks)
