Zachry Berhad, an office supplies specialty store, prepares its operating budget on a quarterly basis. The following data have been assembled to assist in preparing budgets for the second quarter ending June 30, 2021. i. The budgeted sales for the next five months are listed as below: July 25,000 Month April 20,000 May 50,000 August 15,000 June Units 30,000 ii. The company sells the single product at RM10 per unit. iii. A policy has been implemented that requires the company to maintain its ending inventory at 20 percent of the following month's budgeted sales. At the beginning of the second quarter, Zachry Berhad had 4,000 units of inventory. iv. Every single unit of product requires 5 kg of raw material. The policy has been established that materials on hand at the end of each month must be equal to 10 percent of the following
Zachry Berhad, an office supplies specialty store, prepares its operating budget on a quarterly basis. The following data have been assembled to assist in preparing budgets for the second quarter ending June 30, 2021. i. The budgeted sales for the next five months are listed as below: July 25,000 Month April 20,000 May 50,000 August 15,000 June Units 30,000 ii. The company sells the single product at RM10 per unit. iii. A policy has been implemented that requires the company to maintain its ending inventory at 20 percent of the following month's budgeted sales. At the beginning of the second quarter, Zachry Berhad had 4,000 units of inventory. iv. Every single unit of product requires 5 kg of raw material. The policy has been established that materials on hand at the end of each month must be equal to 10 percent of the following
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...
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Transcribed Image Text:month's production. At the beginning of the second quarter, Zachry Berhad has 13,000 kg of
direct raw material on hand. The direct materials cost is RM0.40 per kg.
v. Each unit of the product requires 3 minutes of direct labor and the workers will be paid at
RM10 per hour.
Required:
a. Prepare the Sales Budget for the second quarter 2021.
b. Prepare the Production Budget for the second quarter 2021.
c. Prepare the Material Usage Budget and the Material Purchase Budget for the second quarter
2021.
d. Prepare the Direct Labor Budget for the second quarter 2021.
e. Briefly explain the importance of budget in terms of controlling purposes.
Transcribed Image Text:Zachry Berhad, an office supplies specialty store, prepares its operating budget on a quarterly
basis. The following data have been assembled to assist in preparing budgets for the second
quarter ending June 30, 2021.
i. The budgeted sales for the next five months are listed as below:
Month
April
May
July
June
30,000
August
15,000
Units
20,000
50,000
25,000
ii. The company sells the single product at RM10 per unit.
iii. A policy has been implemented that requires the company to maintain its ending inventory at
20 percent of the following month’s budgeted sales. At the beginning of the second quarter,
Zachry Berhad had 4,000 units of inventory.
iv. Every single unit of product requires 5 kg of raw material. The policy has been established
that materials on hand at the end of each month must be equal to 10 percent of the following
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