Tamy Sdn Bhd produces wooden desks. The following estimates are provided for the month of May, June, July and August 2021. Budgeted wooden desk sales in units 8,000 7,000 6,000 5,000 May June July August The estimated selling price is RM120 per unit. Tamy Sdn Bhd wants to have 10% of the next month's sales in units on hand at the end of each month. REQUIRED a) Prepare the sales budget for the month of May, June , July and Total 2021. b) Prepare the production budget for the month of May, June, July and Total 2021.
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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- Bintang Berhad manufactures Product BFF and it was sold in the market at the price of RM18 per unit. The marketing department of Bintang Berhad has submitted the following sales forecast for the upcoming year 2019 as follows: Quarter 2 12,000 units Quarter 3 14,000 units Quarter 4 13,000 units Month Quarter 1 11,000 units Sales Demand The company expects to start the first quarter with 1,650 units in finished goods inventory. It is the company's policy to hold stocks of finished goods at the end of each quarter equals to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units. The beginning raw materials inventory for the first quarter is budgeted to be 1,400 kg. Each unit of Product BFF requires 2 kg of raw material that costs RM1.40 per kg. The management's policy is to hold ending inventory of raw materials equal to 10% of the following quarter's production needs. The desired ending raw material inventory for the…Covax Ltd manufactures one product known as Covaccine. The following information relate to the preparation of the budget for the year ended 31 December 2020: Sales budget for the product Covaccine Expected selling price per unit R150 Expected sales in units 15 000 All sales are on credit. Covaccine requires 6 units of material A. Raw material A cost price is R5 per unit. Direct labour hours per unit is 1 hour at the cost of R8 per hour. Additional information: At 01 January 2020, stocks were as follows: Product Covaccine 800 units Raw material A 4 500 units At 31 December 2020, stocks were as follows: Product Covaccine 880 units Raw material A 4 950 units Prepare the following: 1.Sales budget 2.Production budget 3.Raw material budget 4.Direct labour budgetThe production department of Harrison Company has submitted the following forecast of units to be produced by quarter for the upcoming year 2017: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Units to be produced 7,000 8,000 6,000 5,000 Additional information: 1. The beginning inventory for the first quarter is budgeted to be 1,400 units. 2. Each unit requires 2 kg of material X that costs RM1.40 per kg. 3. Management desires to end of each quarter with an inventory of material X equal to 10% of the following quarter's production needs. 4. The desired ending inventory of material X for the fourth quarter is 1,500 kg. 5. Each unit requires 0.60 direct labour hours and direct labours are paid RM14 per hour. Required: a. Prepare the company's direct materials budget for each quarter. b. Prepare the company's direct labour budget for each quarter.
- Covax Ltd manufactures one product known as Covaccine. The following information relate to the preparation of the budget for the year ended 31 December 2020: Sales budget for the product Covaccine Expected selling price per unit R150 Expected sales in units 15 000 All sales are on credit. Covaccine requires 6 units of material A. Raw material A cost price is R5 per unit. Direct labour hours per unit is 1 hour at the cost of R8 per hour. Additional information: At 01 January 2020, stocks were as follows: Product Covaccine 800 units Raw material A 4 500 units At 31 December 2020, stocks were as follows: Product Covaccine 880 units Raw material A 4 950 units Prepare the following: 1.Direct labour budgetThe company has decided that security light’s (new Product) selling price of product is £750 oer unit, total sales - 1500 units total budgeted sales is: November- 500 units, December 500 units and January 500 units. The company has just concluded a deal to get a bank loan of £19,000 on the 1st November 2022. The interest on this loan will be paid every month. The company will be required to make 12 equal payments to repay the loan starting from the end of December. From their costs estimates, total fixed cost estimated to be £110,200 and it will be shared equally throughout the period. The variable cost is £230 per unit. The fixed costs are for the whole period, so they are not affected by the level of service. However, the variable costs will increase with services output (ie sales output multiplied with variable cost per product). Variable cost will be paid on the basis of 60% in the month of purchase and 40% the following month. Similarly, revenue from the sale of new security light…Shanell Industrial Limited makes and sells one product, which has the following standard variable production costs per unit. Rs. Direct materials cost (2 kg at Rs.25 per kg) 50 Direct labour cost (3 hours at Rs.40 per hour) 120 Variable production overhead costs (Rs.10 per labour hour) 30 The budgeted selling price per unit is Rs.400 for the coming two years. The production and sales budgets for the next two years are as follows: 2019 2020 Production in units 50,000 60,000 Sales in units 40,000 70,000 There is no opening inventory at the beginning of 2019. Budgeted and actual costs are as follows. Fixed production overhead costs Rs.1,080,000…
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- L Incorporated provided the following estimated sales data in the first five months of 2021: Month Estimated Sales (units) January 15,000 February ??? March 16,000 April ??? May 18,000 The desired ending inventory of finished goods is 20% of next month’s expected sales. Budgeted production for the month of February and April are 16,600 and 18,640 respectively. Each unit costs 120 to manufacture and is sold to yield gross profit of 25% based on cost. All sales are made on account. 20% is collected in the month of sale; 30% of the balance is collected in the following month, another 40% is collected two months after the month of sale while the rest are collected three months after the month of sale. What is the budgeted sales (in pesos) for the month of February? a. 2,400,000 b. 2,512,500 c. 2,010,000 d. 2,450,500 e. Answer not among the choicesL Incorporated provided the following estimated sales data in the first five months of 2021: Month Estimated Sales (units) January 15,000 February ??? March 16,000 April ??? May 18,000 The desired ending inventory of finished goods is 20% of next month’s expected sales. Budgeted production for the month of February and April are 16,600 and 18,640 respectively. Each unit costs 120 to manufacture and is sold to yield gross profit of 25% based on cost. All sales are made on account. 20% is collected in the month of sale; 30% of the balance is collected in the following month, another 40% is collected two months after the month of sale while the rest are collected three months after the month of sale. Ending finished goods inventory in March shall be valued atThe production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,400 6,500 7,200 8,100 Each unit requires 0.65 direct labor-hours, and direct laborers are paid $12.00 per hour. Required: 1. Prepare the company’s direct labor budget for the upcoming fiscal year. Note: Round "Direct labor time per unit (hours)" answers to 2 decimal places.