7.

1 BUDGET ANALYSIS
7.2 Operating Budget

7.1.1 Sales Budget

S’mores Mallow
Sales Budget
For the coming months Oct, Nov and
Dec
Oct Nov De Total
c
Budgeted sales in unit 150 1650 18 4965
0 15
Budgeted Unit Price (RM) 15 15 15 15
Budgeted Sales Revenue
22500 24750 27225 74475
(RM)
Selling price per box is RM15.00

7.1.2 Direct Material Purchases Budget

Marshmallow
S’mores Mallow
Direct Materials Purchases Budget
For the coming months Oct, Nov and
Dec
Oct Nov Dec Total
Production 150 1650 1815 4965
0
Materials per Unit 12 12 12 12
Production needs (unit) 180 19800 21780 5958
00 0
(+) Defixed Ending Inventory 198 2178 2397 2397
0
Total Production 199 21978 24177 6197
80 7
(-) Beginning Inventory 0 1980 2178 0
Cost of Direct Material 0.2 0.2 0.2 0.2
Total Purchases of Direct
3996 4000 4400 12395
Material (RM)

Biscuits
S’mores Mallow
Direct Materials Purchases Budget
For the coming months Oct, Nov and
Dec
Oct Nov De Total
c
Production 1500 1650 18 4965
15
Materials per Unit 3 3 3 3
Production needs (unit) 4500 4950 54 1489
45 5
(+) Defixed Ending Inventory 495 545 59 599
9
Total Needed 4995 5495 60 1549
44 4
(-) Beginning Inventory 0 495 54 0
5
Cost of Direct Material 0.3 0.3 0.3 0.3
Total Purchases of Raw
1499 1500 1650 4648
Material (RM)
Chocolate
S’mores Mallow
Direct Materials Purchases Budget
For the coming months Oct, Nov and
Dec
Oct Nov Dec Total
Production 150 1650 1815 4965
0
Materials per Unit 60 60 60 60
Production needs (unit) 900 9900 10890 2979
00 0 0 00
(+) Defixed Ending Inventory 990 1089 11982 1198
0 0 2
Total Needed 999 1098 12088 3098
00 90 2 82
(-) Beginning Inventory 0 9900 10890 0
Cost of Direct Material 0.02 0.02 0.02 0.02
Total Purchases of Raw
1998 2000 2200 6198
Material (RM)

Oct Nov Dec Total

(RM) (RM) (RM) (RM)
Marshmallow
October purchases (19980 x 0.2) 3996
November purchases (19998 x 0.2) 4000
December purchases (21999 x 0.2) 4400
Total
12395
Biscuits
October purchases (4995 x 0.3) 1499
November purchases (5000 x 0.3) 1500
December purchases (5499 x 0.3) 1650
Total 4648
Chocolates
October purchases (99900 x 0.02) 1998
November purchases (99990 x 2000
0.02) 2200
December purchases (109992 x 6198
0.02)
Total
Total cash disbursement 7493 7499 8249 23241

7.1.3 Direct Labor Budget

S’mores Mallow Direct Labor Budget
For the coming months Oct, Nov and
 Dec
Oct Nov De Total
c
Unit of production 1500 1650 18 4965
15
Direct Labor per unit
0.15 0.15 0.15 0.15
(0.15 hours per box)
Total Labor hour 225 248 27 745
2
Guaranteed labor hour 250 250 25
0
Labor hours paid 250 250 27 772
2
Hourly wage rate 5 5 5 5
Total Budgeted Direct Labor
1250 1250 1360 3860
Cost (RM)
* Guaranteed Labor Hours per month is 250
* 0.15 hour = 9 min
* Direct labor hour rate per hour is RM5.00

7.1.4 Manufacturing Overhead Budget

Oct Nov Dec Total
Budgeted Direct Labor Hour 225 248 272 745
Variable Manufacturing Overhead rate 20 20 20 20
Variable Manufacturing Overhead costs 450 4960 5440 1490
0 0
Fixed Manufacturing Overhead costs 700 700 700 2100
Total Manufacturing Overhead costs 520 5660 6140 1700
0 0
Less: non cash costs (kitchen tools
5 5 5 15
depreciation)
Cash disbursement for manufacturing overhead
519 5655 6135 1698
5 5