Ryan Enterprise produces and sells Wooden Plant Shelve for nearby market in Kuala Sepetang. The business...

Transcribed Image Text:

Ryan Enterprise produces and sells Wooden Plant Shelve for nearby market in Kuala Sepetang. The business uses a budgeting system to control costs and revenues of its product. Mr. Ryan, the owner is worried about the business performance. It was reported that sales dropped in early period of year 2020. However, it seems like performance getting better due to increase in consumer online purchasing habits. The head of Account Department asked you to prepare an operational budget for the year ending 31 December 2021. After analysed past reports, you found the following information regarding standard cost for one unit of Wooden Plant Shelve: RM per unit 100 24 10 21 155 Wood (RM20/meter) Indirect Materials (RM12/set) Labour Costs (RM20/hr) Production Overhead Production Costs It is the company's policy to set selling price at markup of 40% from production costs. The Marketing Director suggested to increase selling price of the product to RM250, starting from 1 July 2021 due to an increase in costs of business operations. Sales assistance provides the following forecast sales trend for each quarter of the year ending 31 December 2021: Quarter Q1 Q2 Sales Trend in units 2,000 2,500 1,500 3,000 Sales Trend are subjected to seasonal variations as follows: Q1 -400 Q2 0 Q3 +250 Q4 -300 Quarterly sales trend for year 2022 are expected to increase by 2% from the previous quarter, however quarterly seasonal variations are expected to be as for Year 2021. The standard material price is expected to increase by 15% starting from 1 October 2021. It is the policy of Ryan Enterprise to always carry sufficient inventories of Wooden Plant Shelve to meet 25% of the next quarter's forecast sales. All materials are to be maintained at 40% of the next quarter's forecast production requirement. However, maximum inventories of Wood should not exceed 4,500 meters to reduce storage costs. Required: a. Prepare the following budgets for each quarters of the year ending 31 December 2021: i. Sales Budget ii. Production budget (round of your answer to the nearest unit) iii. Material Purchase Budget (Wood only) (10 Ryan Enterprise produces and sells Wooden Plant Shelve for nearby market in Kuala Sepetang. The business uses a budgeting system to control costs and revenues of its product. Mr. Ryan, the owner is worried about the business performance. It was reported that sales dropped in early period of year 2020. However, it seems like performance getting better due to increase in consumer online purchasing habits. The head of Account Department asked you to prepare an operational budget for the year ending 31 December 2021. After analysed past reports, you found the following information regarding standard cost for one unit of Wooden Plant Shelve: RM per unit 100 24 10 21 155 Wood (RM20/meter) Indirect Materials (RM12/set) Labour Costs (RM20/hr) Production Overhead Production Costs It is the company's policy to set selling price at markup of 40% from production costs. The Marketing Director suggested to increase selling price of the product to RM250, starting from 1 July 2021 due to an increase in costs of business operations. Sales assistance provides the following forecast sales trend for each quarter of the year ending 31 December 2021: Quarter Q1 Q2 Sales Trend in units 2,000 2,500 1,500 3,000 Sales Trend are subjected to seasonal variations as follows: Q1 -400 Q2 0 Q3 +250 Q4 -300 Quarterly sales trend for year 2022 are expected to increase by 2% from the previous quarter, however quarterly seasonal variations are expected to be as for Year 2021. The standard material price is expected to increase by 15% starting from 1 October 2021. It is the policy of Ryan Enterprise to always carry sufficient inventories of Wooden Plant Shelve to meet 25% of the next quarter's forecast sales. All materials are to be maintained at 40% of the next quarter's forecast production requirement. However, maximum inventories of Wood should not exceed 4,500 meters to reduce storage costs. Required: a. Prepare the following budgets for each quarters of the year ending 31 December 2021: i. Sales Budget ii. Production budget (round of your answer to the nearest unit) iii. Material Purchase Budget (Wood only) (10 Ryan Enterprise produces and sells Wooden Plant Shelve for nearby market in Kuala Sepetang. The business uses a budgeting system to control costs and revenues of its product. Mr. Ryan, the owner is worried about the business performance. It was reported that sales dropped in early period of year 2020. However, it seems like performance getting better due to increase in consumer online purchasing habits. The head of Account Department asked you to prepare an operational budget for the year ending 31 December 2021. After analysed past reports, you found the following information regarding standard cost for one unit of Wooden Plant Shelve: RM per unit 100 24 10 21 155 Wood (RM20/meter) Indirect Materials (RM12/set) Labour Costs (RM20/hr) Production Overhead Production Costs It is the company's policy to set selling price at markup of 40% from production costs. The Marketing Director suggested to increase selling price of the product to RM250, starting from 1 July 2021 due to an increase in costs of business operations. Sales assistance provides the following forecast sales trend for each quarter of the year ending 31 December 2021: Quarter Q1 Q2 Sales Trend in units 2,000 2,500 1,500 3,000 Sales Trend are subjected to seasonal variations as follows: Q1 -400 Q2 0 Q3 +250 Q4 -300 Quarterly sales trend for year 2022 are expected to increase by 2% from the previous quarter, however quarterly seasonal variations are expected to be as for Year 2021. The standard material price is expected to increase by 15% starting from 1 October 2021. It is the policy of Ryan Enterprise to always carry sufficient inventories of Wooden Plant Shelve to meet 25% of the next quarter's forecast sales. All materials are to be maintained at 40% of the next quarter's forecast production requirement. However, maximum inventories of Wood should not exceed 4,500 meters to reduce storage costs. Required: a. Prepare the following budgets for each quarters of the year ending 31 December 2021: i. Sales Budget ii. Production budget (round of your answer to the nearest unit) iii. Material Purchase Budget (Wood only) (10 Ryan Enterprise produces and sells Wooden Plant Shelve for nearby market in Kuala Sepetang. The business uses a budgeting system to control costs and revenues of its product. Mr. Ryan, the owner is worried about the business performance. It was reported that sales dropped in early period of year 2020. However, it seems like performance getting better due to increase in consumer online purchasing habits. The head of Account Department asked you to prepare an operational budget for the year ending 31 December 2021. After analysed past reports, you found the following information regarding standard cost for one unit of Wooden Plant Shelve: RM per unit 100 24 10 21 155 Wood (RM20/meter) Indirect Materials (RM12/set) Labour Costs (RM20/hr) Production Overhead Production Costs It is the company's policy to set selling price at markup of 40% from production costs. The Marketing Director suggested to increase selling price of the product to RM250, starting from 1 July 2021 due to an increase in costs of business operations. Sales assistance provides the following forecast sales trend for each quarter of the year ending 31 December 2021: Quarter Q1 Q2 Sales Trend in units 2,000 2,500 1,500 3,000 Sales Trend are subjected to seasonal variations as follows: Q1 -400 Q2 0 Q3 +250 Q4 -300 Quarterly sales trend for year 2022 are expected to increase by 2% from the previous quarter, however quarterly seasonal variations are expected to be as for Year 2021. The standard material price is expected to increase by 15% starting from 1 October 2021. It is the policy of Ryan Enterprise to always carry sufficient inventories of Wooden Plant Shelve to meet 25% of the next quarter's forecast sales. All materials are to be maintained at 40% of the next quarter's forecast production requirement. However, maximum inventories of Wood should not exceed 4,500 meters to reduce storage costs. Required: a. Prepare the following budgets for each quarters of the year ending 31 December 2021: i. Sales Budget ii. Production budget (round of your answer to the nearest unit) iii. Material Purchase Budget (Wood only) (10

Answer rating: 100% (QA)

a Prepare the Sales Budget Given the provided sales trends and seasonal variations we can calculate ... View the full answer