Pedro Sdn Bhd. manufactures and sells two cookware products in a single plant. The new manager wants
Question:
Pedro Sdn Bhd. manufactures and sells two cookware products in a single plant. The new manager wants to have quarterly budgets and has prepared the following information for the first quarter of 2021. The following information is available:
Budgeted sales:
Product A …….60,000 units @RM100 each
Product B …….40,000 units @RM125 each
Budgeted inventories:
Beginning | Ending | |
Product A Product B Direct material (Metal) Direct material (Plastic) Direct material (Handles) | 20,000 8,000 32,000 kg 29,000 kg 6,000 units | 25,000 10,000 36,000 kg 32,000 kg 7,000 units |
Standard variable costs:
Product A | Product B | |||
Direct materials: Metal Plastic Handles Total materials | 5kg @RM8.00 3kg@RM5.00 1 unit @RM3.00 | RM40.00 15.00 3.00 58.00 | 4kg @RM8.00 3kg@RM5.00 | RM32.00 15.00 47.00 |
Direct labour Variable manufacturing overhead Total | 2hours@RM12.00 2hours@RM1.50 | 24.00 3.00 85.00 | 3hours@RM16.00 3hours@RM1.50 | 48.00 4.50 99.50 |
Variable manufacturing overhead cost is RM384,000 while fixed factory overhead is RM214,000 per quarter (including non-cash expenditure of RM156,000) and is allocated on total units produced.
Financial information are as follows:
- Beginning cash balance is RM1,800,000
- Sales are on credit and are collected 50 percent in the current period and the remainder in the next period. Last quarter’s sales were RM8,400,000. There are no bad debts.
- Purchases of direct materials and labour costs are paid for in the quarter acquired.
- Manufacturing overhead expenses are paid in the quarter incurred.
- Selling and administrative expenses are all fixed and are paid in the quarter incurred. They are budgeted at RM340,000 per quarter, including RM90,000 of depreciation
Construct a cash budget for Pedro SdnBhd for the first quarter of 2021.
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren