Revision Questions QI. Michael Lee now wants his finance manager to prepare the budgets for the next accounting year. The manager has managed to get the production for the dress and pants. The revenue and production cost for one unit is as follows: Dress Pants RM RM per unit Selling price 60 44 Raw material 1 RM6per meter (24) (12) Raw material 2 (6) Direct Labour Hour RM4 per hour (8) Fixed Overheads (2) Profit 18 22 (a) Michael Lee has managed to get a supplier who can supply the raw material 1 which could meet the sales demand. The company will be able to produce the products to be sold over the next three months. The sales budget for January is 15,000 for dresses and 20,000 for the pants. For the following months the sales will increase by 10% of the previous month's sales for both products. 2. 3. Additional information are as follows: 1. The company intends to carry a stock of finished products sufficient to meet 10% of the next month's sales. The company intends to carry sufficient closing raw material stock to meet the following month's production The estimated variable costs and selling prices per unit for shirts and shorts are as detailed above in (a). Required: Prepare the following budgets on a monthly basis for each of the three months January to March 2016: 0 A sales budget showing sales units and sales revenue for each product (including April 2016 (8 marks) (ii) A production budget (in units) for each product, (6 marks) (ii) A raw materiali usage budget (in metres). (3 marks) (iv) A raw material 1 purchases budget (in meters and RM) (7 marks) This question paper consists of 4 questions on 3 printed pages