Good Produce Sdn. Bhd. is a manufacturing company. It manufactures 2 products, known as A and Z.
Question:
Good Produce Sdn. Bhd. is a manufacturing company. It manufactures 2 products, known as
‘A’ and ‘Z’. The following information is given for the year 2019: -
The standard direct materials and direct labour used for each product is as follows:
‘A’ ‘Z’
Material 1 10 units 8 units
Material 2 5 units 9 units
Direct Labour 10 hours 15 hours
Standard direct materials and direct labour costs:
($)
Material 1 8.20 per unit
Material 2 17.00 per unit
Direct Labour 14.00 per hour
Other important data is as follows for the year 2019:
Direct materials
Material 1 Material 2
Opening inventory (units) 9,000 8,500
Closing inventory required (units) 10,000 2,000
Finished products
‘A’ ‘Z’
Forecast sales (units) 8,500 1,600
Selling price per unit $500 $660
Ending inventory required (units) 2,000 100
Beginning inventory (units) 200 90
Required:
Prepare the following budgets for the year 2019: -
(a) Sales budget
(3 marks)
(b) Production budget
(4 marks)
(c) Direct material usage budget
(2 marks)
BMAC5203/SIMAD/JAN2020
3
(d) Direct material (purchase budget)
(4 marks)
(e) Direct labour budget
(3 marks)
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen