Question

Direct materials will be RM10 per unit of finished product. Materials will be purchased in
the month prior to their use in production, and paid for in the month following purchase.
2. Direct labour will be paid at a rate of RM4 per unit of finished product, payable in the
month of production. A bonus payment of RM2.00 per unit will be paid on all additional
monthly production in excess of 500 units, paid in the month following production.
3. Fixed production overheads of RM20, 000, including depreciation of RM6, 800, are
budgeted for the year ahead. These are budgeted to be the same each month and, apart
from depreciation, are payable in the month they are incurred.
4. Variable selling expenses are expected to be RM1.50 per unit payable in the month of sale.
5. Fixed administration overheads of RM6, 000 for the year ahead are budgeted to be the same
per month and payable in the month they are incurred.
Cash:
The company expects to have a bank overdraft balance of RM2, 500 at the start of January
Year 2.
Required:
Prepare the following budgets for each of months January to March Year 2:
(a) Production
(b) Material purchases (RM)
(c) Labour cost
(d) Cash
2
Question

Answer 1

Answer:

RM10=468,_RHS_LHS B2 LHS =THE ANSWER

Answer 2

Answer:

RMIO = 468,RHS,LHS

B2 LHS