QUESTION 8 (25 marks) EASY FACTORY has the following details of its activity: The direct labor rate includes wages and other benefits. In March 2018, labor -saving- machinery will be fully operational. As of 1 March 2018, also, the factory's labor policy indicates an increase in the direct labor wages which has been included in the direct labor rate. Direct labors are paid in the month services provided. EASY FACTORY expects to have 10,000 meters of material in inventory at 31 December 2017 and the policy is to have a desired ending inventory of material of 40% of the following months expected production requirement. Suppliers of material are paid in the month after purchase. Estimated production (units) Selling price per unit (RM) Direct material cost per meter (RM) Direct labor hours per unit Direct material requirement per unit (meters) Direct Labor rate per hour (RM) January 20,000 500 20 4 5 15 February 24,000 500 20 4 5 15 March 18,000 500 20 3.5 5 16 April 22,000 500 20 3.5 5 16 a. You are required to prepare: Direct material usage and purchase budget (including payment to suppliers) for the month of February and March 2018 (10 marks) b. Direct labor budget (including payment to direct labor) for the month of February and March 2018 (5 marks) EASY Factory has a credit sale of RM50,000 during January, RM65,000 during February and RM70,000 during March. Collection from customer are done based 60% in the month of sales, 30% in the month after sales and 10% in the second month after sales. Compute the total collection during February 2018. (3 marks) d. Explain with an appropriate illustration on how organization goals, strategic plans and the master budget is related (7 marks) c