BMAC 5203

ACCOUNTING FOR BUSINESS DECISION MAKING

Budget for the month and when the selling price is RM 12 per unit

The Sales Budget

May June July August September October November Quarter

Budgeted Sales in Units 15,000 20,000 30,000 40,000 50,000 35,000 25,000 120,000
Selling Price per unit (RM) 12 12 12 12 12 12 12 12
Total budgeted sales (RM) 180,000 240,000 360,000 480,000 600,000 420,000 300,000 1,440,000

Credit on sales

Expected Cash Collection

Account receiable
May 20% collected 36,000
June 30% collected 72,000
June 20% collected 48,000

July Sales
50% collected in the month of sales 180,00 180,000
0
30% collected in the month following sales 108,00 108,000
0
20% collected in two month following sales 72,000 72,000

August Sales
50% collected in the month of sales 240,00 240,000
0
30% collected in the month following sales 144,000 144,000
20% collected in two month following sales

September Sales
50% collected in the month of sales 300,000 300,000
30% collected in the month following sales
20% collected in two month following sales

Total Cash Collected 288,00 396,00 516,000 1,200,00

0 0 0

Ending inventory for the budget sales

The Production Budget

Budgeted Sales 30,000 40,000 50,000 120,000

Add:Desired Ending Inventory 8,000 10,000 7,000 7,000
Total Needs 38,000 50,000 57,000 127,000
Less:Beginning Inventory 4,000 8,000 10,000 4,000
Required Production 34,000 42,000 47,000 123,000

Direct materials on hand

DIRECT MATERIALS BUDGET
Production 34,000 42,000 47,000 123,000
Materials per Unit (kg) 2 2 2 2
Production Needs 46,000 68,000 84,000 94,000 246,000
Add:Desired Ending Inventory 13,600 16,800 18,800 13,200 13,200
Total Needs 59,600 84,800 102,800 107,200 259,200
Less:Beginning Inventory 10,000 16,800 18,800 10,000
Materials to be Purchased 74,800 86,000 88,400 249,200

Expected cash

Expected Cash Disbursement for Materials

Account Payable
June
50% purchases is paid in the month of 37,200
purchase

July 37,200 37,200

50% purchases is paid in the month of 56,100 56,100
purchase
50% purchases is paid in the following
month of purchase

August 56,100 56,100

50% purchases is paid in the month of 64,500 64,500
purchase
50% purchases is paid in the following
month of purchase
September 64,500 64,500
50% purchases is paid in the month of 66,300 66,300
purchase
50% purchases is paid in the following
month of purchase

Total Expected Cash Disbursement 93,300 120,600 130,800 344,700

Direct labour cost RM 8.00 per hour

Direct Labour Cost

Unit of Productions 34,000 42,000 47,000 123,000
Direct Labour per Unit 0.1 0.1 0.1 0.1
Labour Hours Required 3,400 4,200 4,700 12,300
Hourly Wage Rate (RM) 8 8 8 8
Total Direct Labour Cost (RM) 27,200 33,600 37,600 98,400