You are an accountant at Sepang Bikes Company, Sepang Bikes Company is a manufacturer of rugged bikes. The marketing manager expects an increase in sales of rugged bikes due to the success ongoing advertising campaigns. So the management asks you provide a master budget taking into account the increase in sales. In order to prepare a budget, information must first be gathered from various sources such as selling price, expenses involved, cost of raw materials and so on. The following is information that has been collected: 1. The estimated sales are 100,000 units of rugged bikes with a price of RM800 per unit. 2. According to accounting records, the initial stock balance is 2,500 for bicycles with a unit cost of RM454.75, With the increase in sales then the management sets the final balance of the stock is 3,500 units. 3. Initial balance of direct raw materials: 

	RM
Wheels and tires	20,000
components	70,000
frames	50,000
Total	140,000

4. Cost per unit of direct material is expected: 

	RM
Wheels and tires	20
components	70
frames	50

5. The manager wants the final inventory: 

	RM
Wheels and tires	25,000
components	87,500
frames	62,500
Total	175,000

6. Quantity and direct labor cost per unit is expected to: 

Labour	Hour	Cost per hour
Installation	1.5	RM25
Test	0.15	RM15

7. For overhead, you use information you gathered from last years operations and update with current prices. Production overhead costs per unit are expected as follows: Overhead changes (cost per unit): 

	RM
Supply	20.00
Indirect labour	37.50
Maintenance	10.00
Other	7.50
Total	75.00

8. You expect a total of RM20,200,000 to be spent on manufacturing overhead costs remains as follows: Depreciation of RM4,04,000 Property tax: 1,010,000 Insurance: 1,414,000 Factory supervisor RM5,050,000 Fringe benefits: RM7,070,000 Other: RM1,616,000 Overhead costs are absorbed by the amount of production spent. 9. You also estimate the operating costs for the support department. These costs are fixed costs: Administrative costs: RM16,478,215 Promotion: RM9,886,929 delivery: RM4,943,465 customer service: RM1,647,821 10. Income tax is expected at the rate of 30%. You as an accountant are required to provide: a. The following budgets: i. Final stock budget ii. Budget the cost of sales items iii. Budget support department iv. Income Statement Budget