Taqwa Duck Farm (TDF) is a manufacturer of bran for duck food under the Gold Coin...
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Taqwa Duck Farm (TDF) is a manufacturer of bran for duck food under the Gold Coin brand. The company sells bran packed in sacks containing 25kg. The wholesale price at the factory for one sack of bran is RM25 and the retail price is RM32. The company only markets production to wholesalers only. It is expected that the price of bran to wholesalers will be increased to 10% starting from the fourth quarter. Here are the sales projections made by the company for 2020 and the first quarter of 2021: year 2020 quarter 1 quarter 2 quarter 3 quarter 4 year 2021 quarter 1 quantity (Sack) 10,000 8,000 9,000 11,000 15,000 The ending finished goods inventory in 2019 was 2,000 sacks. Each sack requires 25 kg of raw material with an estimated average cost of RM0.30 per kilogram. To ensure that the final finished goods inventory is always available, the company sets the final inventory value to be 10% of the next quarter's sales. In addition, raw material inventory must meet 20% of the next quarter's production requirements. Records show that the inventory value of raw materials at the end of 2019 is 40,000kg. A sack of bran requires 1.2 hours of direct labor at a rate of RM4 per hour. Manufacturing overhead costs will be absorbed at a rate of 40% on direct labor costs. Required: a) Prepare the following budget for the four quarters of 2020: Sales Budget. i) ii) Production Budget. iii) Direct Materials Budget. iv) Direct Labor Budget. v) Manufacturing Overhead Budget. b) Determine the cost of producing a sack of Gold Coin bran. Taqwa Duck Farm (TDF) is a manufacturer of bran for duck food under the Gold Coin brand. The company sells bran packed in sacks containing 25kg. The wholesale price at the factory for one sack of bran is RM25 and the retail price is RM32. The company only markets production to wholesalers only. It is expected that the price of bran to wholesalers will be increased to 10% starting from the fourth quarter. Here are the sales projections made by the company for 2020 and the first quarter of 2021: year 2020 quarter 1 quarter 2 quarter 3 quarter 4 year 2021 quarter 1 quantity (Sack) 10,000 8,000 9,000 11,000 15,000 The ending finished goods inventory in 2019 was 2,000 sacks. Each sack requires 25 kg of raw material with an estimated average cost of RM0.30 per kilogram. To ensure that the final finished goods inventory is always available, the company sets the final inventory value to be 10% of the next quarter's sales. In addition, raw material inventory must meet 20% of the next quarter's production requirements. Records show that the inventory value of raw materials at the end of 2019 is 40,000kg. A sack of bran requires 1.2 hours of direct labor at a rate of RM4 per hour. Manufacturing overhead costs will be absorbed at a rate of 40% on direct labor costs. Required: a) Prepare the following budget for the four quarters of 2020: Sales Budget. i) ii) Production Budget. iii) Direct Materials Budget. iv) Direct Labor Budget. v) Manufacturing Overhead Budget. b) Determine the cost of producing a sack of Gold Coin bran.
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Answer rating: 100% (QA)
a Budgets for the Four Quarters of 2020 i Sales Budget Year 2020 Quarter 1 Sales Quantity 10000 sacks Sales Price per Sack RM32 Quarter 2 Sales Quantity 8000 sacks Sales Price per Sack RM32 Quarter 3 ... View the full answer
Related Book For
Financial Theory and Corporate Policy
ISBN: 978-0321127211
4th edition
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
Posted Date:
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