REQUIREMENT: Budgets and Budgetory Controls

Part 1: CLO4

Good Produce Sdn. Bhd. is a manufacturing company. It manufactures 2 products, known as 'A' and 'Z'. The following information is given for the year 2019: -

The standard direct materials and direct labour used for each product is as follows:

'A''Z'

Material 110 units8 units

Material 25 units9 units

Direct Labour10 hours15 hours

Standard direct materials and direct labour costs:

(RM)

Material 18.20 per unit

Material 217.00 per unit

Direct Labour14.00 per hour

Other important data is as follows for the year 2019:

Direct materials

Material 1Material 2

Opening inventory (units)9,0008,500

Closing inventory required (units)10,0002,000

Finished products

'A''Z'

Forecast sales (units)8,5001,600

Selling price per unitRM500RM660

Ending inventory required (units)2,000100

Beginning inventory (units)20090

Required:

Prepare the following budgets for the year 2019: -

(a)Sales budget (3 marks)

(b)Production budget(4 marks)

(c)Direct material usage budget (2 marks)

(d)Direct material (purchase budget)(4 marks)

(e)Direct labour budget(3 marks)