ACCOUNTING II QSA 0264

SEM 3 19/20

ACCOUNTING GROUP PROJECT

PREPARED FOR:

MADAM MANIZAH MAZALI

PREPARED BY:

MATRIC NUMBER NAME

190980 HANNAN FALIHA BINTI FARID SUFIAN
190348 AISYAH IZZATI BINTI AHMAD SHABRI
192749 NUR AMNI ATHIRAH BINTI HASIM
192531 NOR SYUHADA BINTI ROSLEEN
190302 AINI IZZATY BINTI AHMAD ZAIRY

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TABLE OF CONTENTS

1. Introduction to Business…………………………………………………………..4

2. Picture of Product…………………………………………………………………5

3. Pictures of the Component of Direct Material……………………………….….5

4. Calculation of Product Cost

Direct Materials………………………………………………………………..….6

Direct Labour…………………………………………………………………..…6

Receipts for Purchases of Direct Material………………………………………..6

5. List of Manufacturing Overhead…………………………………………………7

6. List of Period Cost…………………………………………………………………7

7. Calculation of POHR……………………………………………………………...7

8. Determination of Selling Price and Calculation of Mark-up…………………...7

9. Classification of Costs

Variable Costs…………………………………………………………………….8

Fixed Costs………………………………………………………………………..8

10. Cost-Volume-Profit Analysis

Break-even quantity and sales…………………………………………………....9

Target quantity and sales with target net income………………………………...9

CVP Table and Graph…...……………………………………………………….9

11. Budgets

Sales Budget…………………………………………………………………….10

Production Budget………………………………………………………………10

Direct Material Usage Budget…………………………………………………..10

Direct Material Purchase Budget………………………………………………..11

Direct Labour Budget……………………………………………………………11

Manufacturing Overhead Budget………………………………………………..12

Administrative and Selling Expenses Budget…………………………………...13

2
 Cash Budget………………………………………………………………….…14

12. Budgeted Statement of Profit and Loss……………………………………….15

13. Budgeted Statement of Financial Position…………………………………….

14. Conclusion……………………………………………………………………….

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INTRODUCTION TO BUSINESS

Clutch Maker Sdn. Bhd. is a private company that produce clutch with attractive
design. It is made from quality cotton fabric with thick interface as for its inner part.
Our clutch comes with a design that is convenient, easy to hold and also has better
grip. It is sold for RM 26.80 per unit. Here is our organization chart:

Hannan Faliha binti

Farid Sufian
Chief Executive Officer

Aisyah Izzati binti

Ahmad Shabri
Production Manager

Nor Syuhada binti Aini Izzaty binti Nur Amni Athirah

Rosleen Ahmad Zairy binti Hasim
Human Resource
Marketing Manager Technical Manager
Manager

The initial capital of our company is 80% from bank loan amounted to RM40000
and another 20% is from issuance of shares. Capital expenditures involve in this
company are transportation cost, insurance against damage and installation cost as
well. Several preliminary expenses are also incurred. They are lawyer’s fees and
registration fees.

POLICIES

 Clutch Maker Sdn. Bhd has an authorized share capital consisting 12,000
ordinary shares of RM1 par value and 8,000 8% preferences shares of RM1
par value
 Planned ending inventory for production budget is 10% from unit to be sold
 Planned ending inventory for direct material is 10% from total production
 Depreciation is 10% on cost per annum
 Tax is based on 10% of net income.
 Monthly stationery is based on increase of sales each month.
 Monthly office utility is based on increase of sales for each month.

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PICTURE OF THE PRODUCT

PICTURES OF THE COMPONENT OF DIRECT MATERIALS

(i) Cotton fabric (ii) Accessories

(iii) Thick interface (iv) Zipper

5
CALCULATION OF PRODUCT COST
a. Direct Materials

Materials Quantity Price/Unit Total Cost (RM)

Cotton Fabric 0.5m RM12/m 6.00
Thick interface 0.25m RM3.90/m 0.98
Zipper 1 pcs RM1.00/pcs 1.00
Accessories 0.71m RM1.90/m 1.35
TOTAL 9.33

b. Direct Labor
1 hour x RM5/hr = RM 5 (15 labors)

c. Receipts

6
LIST OF MANUFACTURING OVERHEAD

Manufacturing Overhead August (RM) September (RM) October (RM)

Indirect materials 766 (RM)(766
(( (RM) 766
Indirect labor 2188 2188 2188
Rent on sewing machine 3000 3000 3000
Rent on factory 450 450 450
Electricity bills 1929.84 2140.37 2298.26
Insurance on factory 100 100 100
Total Cost 8433.84 8644.37 8802.26

LIST OF PERIOD COST

Period Cost August (RM) September(RM) October (RM)

Advertisement expenses  200 200 200
Office rent 400 400 400
Office utilities 300 360 390
Office insurance 700 700 700
Depreciation on office equipment 83 83 83
Stationery 80 96 104
Salary 5000 5000 5000
Director’s fee 10000 10000 10000
Audit fees 500 500 500
Total Cost 17263 17339 17377

CALCULATION OF PRE-DETERMINED MANUFACTURING OVERHEAD

RATE (POHR): CALCULATION FOR 3 MONTHS

8433 . 84+8644 .37+8802. 26

=
POHR 2200+2440+2620

=RM 3 . 56 for 3 months

DETERMINATION OF SELLING PRICE OF THE PRODUCT AND

CALCULATION OF MARK-UP

Cost: RM 17.89
Selling Price= 17.89×50 % markup
= RM 26.84/rounded off to 26.80

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CLASSIFICATION OF COSTS

Variable Costs Fixed Costs

PRODUCT Direct labor Indirect labor
COST Direct materials Indirect materials
Electricity bills Rent on factory
Insurance on factory
Rent on sewing machine
PERIOD Stationery expenses  Depreciation on office equipment 
COST Office utilities  Advertisement expenses 
Office rent 
Administration salary  
Director's fee 
Audit fees 
Office insurance 

COST-VOLUME-PROFIT ANALYSIS (CALCULATION FOR 3 MONTHS)

a. Break-even quantity and sales

Total Fixed Contribution Break-even

Break-even
Costs Margin/ Quantity
Sales RM
  RM RM unit Units
August 23387 11.40 2051.49 54979.96
September 23387 11.43 2046.11 54835.66
October 23387 11.45 2042.53 54739.88

b. Target quantity and sales with target net income

Target Sales Target Net Income Target Quantity

  RM RM Units
August 53600 (587) 2000
September 64320 4045 2400
October 69680 6385 2600

CVP Table and Graph

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 Total Fixed Total Variable
Total Costs Total Sales
Units Costs Costs
RM RM
RM RM
0 23387 0 23387 0
2000 23387 30800 54187 53600
2400 23387 36888 60275 64320
2600 23387 39910 63297 69680

  August September October

Variable cost per
15.40 15.37 15.35
unit
Selling price
26.8 26.8 26.8
RM
Total Fixed Cost
23387 23387 23387
RM
       
Break-even
Quantity 2051.49 2046.11 2042.53
Units

Break-even Sales
54979.96 54835.66 54739.88
RM

Break-Even Analysis
80000

70000

60000

50000

40000

30000

20000

10000

0
0 2000 2400 2600

Units

Total Costs RM Total Sales RM

SALES BUDGET

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 Sales Budget
August September October
Product
Units to sell 2000 2400 2600
Price 26.80 26.80 26.80
Total revenue 53600 64320 69680

PRODUCTION BUDGET

Production Budget
August September October
Units to be sold 2000 2400 2600
Planned ending inventory 200 240 260
(10% unit sold) 2200 2640 2860
Beginning inventory (0) (200) (240)
Units to be produced 2200 2440 2620

DIRECT MATERIAL USAGE BUDGET

Direct Material Usage Budget (August)

Material Units (2200) Price (RM) RM
Cotton Fabric 1100 12 13200
Thick interface 550 3.90 2145
Zipper 2200 1.00 2200
Accessories 1562 1.90 2967.8
Total 21512.8

Direct Material Usage Budget (September)

Material Units (2440) Price (RM) RM
Cotton Fabric 1220 12 14640
Thick interface 610 3.90 2379
Zipper 2440 1.00 2440
Accessories 1732 1.90 3290.8
Total 22749.8

Direct Material Usage Budget (October)

Material Units (2620) Price (RM) RM
Cotton Fabric 1310 12 15720
Thick interface 655 3.90 2554.5
Zipper 2620 1.00 2620
Accessories 1860 1.90 3534
Total 24428.5
DIRECT MATERIAL PURCHASE BUDGET

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 Direct Material Purchase Budget (August)
Cotton Thick Zipper Accessories
Quantity to meet Fabric
Units Interface
Units Units Units
Production 1100 550 2200 1562
Planned ending inventory 110 55 220 156
(10% of production) 1210 605 2420 1718
Planned beginning inventory 0 0 0 0
Units to be purchased 1210 605 2420 1718
Planned purchase price 12 3.90 1.00 1.90
14520 2359.5 2420 3264.2

Direct Material Purchase Budget (September)

Cotton Thick Zipper Accessories
Quantity to meet Fabric
Units Interface
Units Units Units
Production 1220 610 2440 1732
Planned ending inventory 122 61 244 173
(10% of production) 1342 671 2684 1905
Planned beginning inventory (110) (55) (220) (156)
Units to be purchased 1232 616 2464 1749
Planned purchase price 12 3.90 1.00 1.90
14784 1848 2464 3323.1

Direct Material Purchase Budget (October)

Cotton Thick Zipper Accessories
Quantity to meet Fabric
Units Interface
Units Units Units
Production 1310 655 2620 1860
Planned ending inventory 131 65 262 186
(10% of production) 1441 720 2882 2046
Planned beginning inventory (122) (61) (244) (173)
Units to be purchased 1319 659 2638 1873
Planned purchase price 12 3.90 1.00 1.90
15828 2570.1 2638 3558.7

DIRECT LABOR BUDGET

Direct Labor Budget

August September October
Budgeted productions (units) 2200 2440 2620
Hours per unit 1 1 1
Total budgeted hours 2200 2440 2620
Budgeted wage rate per hour 5 5 5
Total wages 11000 12200 13100
MANUFACTURING OVERHEAD BUDGET

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 Manufacturing Overhead Budget (August)
Variable OHR/DLH Overhead
Variable Overhead
Electricity Bills 0.516 3740(0.516) = 1929.84
Fixed Overhead
Indirect labor 2188
Indirect materials 766
Rent on factory 450
Insurance on factory 100
Rent on sewing machine 3000
Total OH 8433.84
Budgeted overhead rate RM3.83
(OH/DLH)

Manufacturing Overhead Budget (September)

Variable OHR/DLH Overhead
Variable Overhead
Electricity Bills 0.516 4148(0.516) = 2140.37
Fixed Overhead
Indirect labor 2188
Indirect materials 766
Rent on factory 450
Insurance on factory 100
Rent on sewing machine 3000
Total OH 8644.37
Budgeted overhead rate RM3.54
(OH/DLH)

Manufacturing Overhead Budget (October)

Variable OHR/DLH Overhead
Variable Overhead
Electricity Bills 0.516 4454(0.516) = 2298.26
Fixed Overhead
Indirect labor 2188
Indirect materials 766
Rent on factory 450
Insurance on factory 100
Rent on sewing machine 3000
Total OH 8802.26
Budgeted overhead rate RM3.36
(OH/DLH)

SELLING AND ADMINISTRATIVE EXPENSES BUDGET

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 Selling and Administrative Budget (August)
SELLING:
Advertisement 200
ADMINISTRATIVE:
Office rent 400
Office utilities 300
Office insurance 700
Depreciation on office equipment 83
Stationery 80
Salary 5000
Director’s fee 10000
Audit fees 500 17063
17263

Selling and Administrative Budget (September)

SELLING:
Advertisement 200
ADMINISTRATIVE:
Office rent 400
Office utilities 360
Office insurance 700
Depreciation on office equipment 83
Stationery 96
Salary 5000
Director’s fee 10000
Audit fees 500 17139
17339

Selling and Administrative Budget (October)

SELLING:
Advertisement 200
ADMINISTRATIVE:
Office rent 400
Office utilities 390
Office insurance 700
Depreciation on office equipment 83
Stationery 104
Salary 5000
Director’s fee 10000
Audit fees 500 17177
17377

CASH BUDGET

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 Cash Budget
August September October
Opening Balance 0 31962.46 35762.99
Revenues 53600 64320 69680
Capital 50000 0 0
103600 96282.46 105442.99
Payments
Purchases 22563.7 22419.1 24594.8
Wages 11000 12200 13100
Manufacturing overhead 8433.84 8644.37 8802.26
Selling and administrative 17180 17256 17294
expense
Office equipment 9960 0 0
Registration fee 1500 0 0
Lawyer’s fee 1000 0 0
71637.54 60519.47 63791.06
Closing balance 31962.46 35762.99 41651.93

CLUTCH MAKER SDN. BHD.

MANUFACTURING STATEMENT FOR THREE MONTHS ENDED
31ST OCTOBER 2020

RM RM
Direct materials:
Net purchase of materials 69577.6  
Ending material inventory (886.5)  
Direct materials used   68691.1
Direct labour   36300
Prime cost   104991.1
Manufacturing overhead:    
Electricity bills 6368.47  
Indirect labor 6564  
Indirect materials 2298  
Rent on factory 1350  
Insurance on factory 300  
Rent on sewing machine 9000 25880.47
Cost of goods manufactured   130871.57

CLUTCH MAKER SDN. BHD.

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 STATEMENT OF PROFIT AND LOSS FOR THREE MONTHS ENDED

31ST OCTOBER 2020

RM RM
Sales   187600
Less: Cost of goods sold    
Purchases 130871.57  
Closing inventories (260)(17.89) (4651.4)  
    (126220.17)
Gross Income   61379.83
Less: Expenses    
Advertisement 600  
Office rent 1200  
Office utilities 1050  
Office insurance 2100  
Depreciation on office equipment 249  
Stationery 280  
Salary 15000  
Director’s fee 30000  
Audit fees 1500
Lawyer’s fee 1000
Registration fee 1500 (54479)
Net income before tax   6900.83
Tax   (690.08)
Retained profit c/f   6210.75

CLUTCH MAKER SDN. BHD.

STATEMENT OF FINANCIAL POSITION AS AT

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 31ST OCTOBER 2020

RM RM RM
Non-Current Assets Cost Depreciation NBV
Office Equipment 9960 249 9711

Current Assets
41651.93
Cash
886.5
Inventory of Materials
4651.4
Inventory of Finished Goods
47189.83

Current Liabilities
690.08
Tax Payable
46499.75
Working Capital
56210.75

Financed by:
Shareholder’s Equity Authorized Issued
Ordinary Shares Capital 12000 6000
8% Preference Shares Capital 80000 4000
20000 10000
Reserves
6210.75
Retained Earnings c/f
16210.75
Non-Current Liabilities
Bank Loan 40000
56210.75

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