Question
In: Accounting
Jaka Sdn Bhd., manufactures and sells concrete blocks for residential and commercial building. Jaka expects the...
Jaka Sdn Bhd., manufactures and sells concrete blocks for residential and commercial building. Jaka expects the following sales unit, price per unit and desired ending inventory for year 2021.
|
Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
|
|
Sales unit |
2,000,000 |
6,000,000 |
6,000,000 |
2,000,000 |
|
Price/unit (RM) |
0.70 |
0.70 |
0.80 |
0.80 |
|
Ending Inventory |
500,000 |
500,000 |
100,000 |
100,000 |
Inventories for both 1st January 2021 and 1st January 2022 are expected to be 100,000 blocks.
The raw materials and direct labour required for each concrete block are as follows:
|
Units |
Cost |
|
|
Raw materials |
26kg |
RM0.01/kg |
|
Direct labour |
0.015 hour |
RM14/hour |
Jaka’s policy is to have 5 million kg of raw materials in ending inventory for the third and fourth quarters and 8 million kg of the materials in ending inventory for the first and second quarters.
Required:
Prepare the following budgets for the year 2021: -
- Sales budget. Show total sales by quarter and in total for the year.
- Production budget. Show total production unit by quarter and in total for the year.
- Direct material usage and purchase budget.
- Direct labour budget.
Solutions
Expert Solution
| Sr. No. | Sales Budget | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year 2021 | Remarks |
| 1 | Sales units | 2,000,000 | 6,000,000 | 6,000,000 | 2,000,000 | 16,000,000 | |
| 2 | Price/unit | 0.70 | 0.70 | 0.80 | 0.80 | ||
| 3 | Sales value | 1,400,000 | 4,200,000 | 4,800,000 | 1,600,000 | 12,000,000 | 1 X 2 |
| Sr. No. | Production budget | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year 2021 | Remarks |
| 1 | Opening Inventory | 100,000 | 500,000 | 500,000 | 100,000 | 100,000 | |
| 2 | Add: Sales units | 2,000,000 | 6,000,000 | 6,000,000 | 2,000,000 | 16,000,000 | |
| 3 | Less: Closing inventory | -500,000 | -500,000 | -100,000 | -100,000 | -100,000 | |
| 4 | Production units | 1,600,000 | 6,000,000 | 6,400,000 | 2,000,000 | 16,000,000 | 1 + 2 - 3 |
| Sr. No. | Material usage and purchase budget | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year 2021 | Remarks |
| 1 | Production units | 1,600,000 | 6,000,000 | 6,400,000 | 2,000,000 | 16,000,000 | |
| 2 | Raw material usage (26kg per block) | 41,600,000 | 156,000,000 | 166,400,000 | 52,000,000 | 416,000,000 | 2 X 26kg |
| 3 | Add: Opening stock of Raw material | 5,000,000 | 8,000,000 | 8,000,000 | 5,000,000 | 5,000,000 | |
| 4 | Less: Closing stock of Raw material | -8,000,000 | -8,000,000 | -5,000,000 | -5,000,000 | -5,000,000 | |
| 5 | Raw material purchased in units | 38,600,000 | 156,000,000 | 169,400,000 | 52,000,000 | 416,000,000 | 2 + 3 - 4 |
| 6 | Raw material cost (RM 0.01/kg) | 386,000 | 1,560,000 | 1,694,000 | 520,000 | 4,160,000 | 5 X RM0.01 |
| Sr. No. | Labour Budget | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year 2021 | Remarks |
| 1 | Production units | 38,600,000 | 156,000,000 | 169,400,000 | 52,000,000 | 416,000,000 | |
| 2 | Labour in hrs (0.015 hrs per unit) | 579,000 | 2,340,000 | 2,541,000 | 780,000 | 6,240,000 | 1 X 0.015 hrs |
| 3 | Labour cost (RM14/hr) | 8,106,000 | 32,760,000 | 35,574,000 | 10,920,000 | 87,360,000 | 2 X RM 14 |
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