Name: Ridzuan bin Saharun

Student ID: 2017700141

Course: MAF551
Group: NACAB

Answer Question 4

(i) Production Budget

Year 2020 2021

Period Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1
Budget sales (pairs) 15000 13000 13000 11000 10500
Add: Closing Inventory (W1) 6500 6500 5500 5250 7250
Less: Opening Inventory (W2) -7500 -6500 -6500 -5500 -5250
Production 14000 13000 12000 10750 12500

WORKING

W1 - Closing Inventory
= Next quarter forecast sales x 50%

Year 2020
Quarter 1 Quarter 2 Quarter 3 Quarter 4
= 13,000 x 50% = 13,000 x 50% = 11,000 x 50% = 10,500 x 50%
= 6,500 = 6,500 = 5500 = 5,250

Year 2021
Quarter 1
= 14,500 x 50%
= 7,250

W2 - Opening Inventory
= current quarter sales x 50%

Year 2020
Quarter 1 Quarter 2 Quarter 3 Quarter 4
= 15,000 x 50% = 13,000 x 50% = 13,000 x 50% = 11,000 x 50%
= 7,500 = 6,500 = 6,500 = 5,500

Year 2021
Quarter 1
= 10,500 x 50%
= 5,250
(ii) Purchase Budget - Material CO3 Foam

Period Quarter 1 Quarter 2 Quarter 3 Quarter 4

Production used (units) 14,000 13,000 12,000 10,750
Add: Closing Inventory (W3) 9,100 8,400 7,525 8,750
Less: Opening Closing (W4) -9,800 -9,100 -8,400 -7,525
13,300 12,300 11,125 11,975
Unit of Material 4 4 4 4
Material Used (units) 53,200 49,200 44,500 47,900
Price per unit (RM) (W5) RM3.50 RM3.50 RM3.50 RM3.50
Total Material Used (units) 186,200 172,200 155,750 167,650

WORKING

W3 - Closing Inventory
= Production used for next quarter x 70%

Quarter 1 Quarter 2 Quarter 3 Quarter 4

= 13,000 x 70% = 12,000 x 70% = 10,750 x 70% = 12,500 x 70%
= 9,100 = 8,400 = 7,525 = 8,750

W4 - Opening Inventory
= Current Production Used x 70%

Quarter 1 Quarter 2 Quarter 3 Quarter 4

= 14,000 x 70% = 13,000 x 70% = 12,000 x 70% = 10,750 x 70%
= 9,800 = 9,100 = 8,400 = 7,525

W5 - Price per unit

Remarks: as per given RM 7 per pack (each pack consist of 2 units CO3 Foam)

= RM 7 / 2
= RM 3.50

Period Quarter 1 Quarter 2 Quarter 3 Quarter 4

Production Used (units) 14,000 13,000 12,000 10,750
Labour Hours 8 8 8 8
Total hours required 112,000 104,000 96,000 86,000
Basic hours available (W6) 106,560 106,560 106,560 106,560
Total Overtime (Hours) (W7) 5,440 0 0 0
Basic Rate (W8) 852,480 852,480 852,480 852,480
Overtime payment (W9) 60,480 0 0 0
Total Labour Cost (RM) 912,960 852,480 852,480 852,480
WORKING

W6 - Basic Hours Available W9 - Overtime Payment

= Total workers x total hours x total month Overtime rate 1st 3,000 hrs = 1.3 (basic is
= 222 workers x 160 hours x 3 months 1 and premium 30%)
= 106,560 Overtime rate >3,000 hrs = 1.5 (baisc is 1
and premium 50%)
W7 - Total Overtime
= Total hours required - Basic hours available 1st 3,000 hrs
= 112,000 - 106,560 = 3,000 x 1.3 x RM8
= 5,440 =RM 31,200

W8 - Basic rate >3,000 hrs

= Basic hours available x labour hours = (5,440 - 3,000) x 1.5 x RM8
= 106,560 x 8 hours = RM 29,280
= 852,480
Total = RM 31,200 + RM 29,280
= RM 60,480