Set B

QUESTION 1 (80 marks)

Pipizola Sdn Bhd (PSB) is a producer of Sedap Biscuit in Banting.The followings are information of
PSB for the preparation of the budget for forth quarter of 2020 :

(1) The sales and marketing department PSB forecast that the company will sell 20,000 packs of
biscuits in October 2020. Sales will increase 500 packs for the following months. Selling price
for each pack is RM4.00.

(2) Each pack requires 0.25 kilograms of direct material and 0.5 hours of direct labour. The price per
kg of direct material is RM1.20 and the direct labour cost per hour is RM0.70.

(3) Overhead rates change is RM1.30 per labour hour. While the fixed overhead cost of the plant
for each month is as follows:

Fixed Overheads: RM
Factory Rent 4,500

Factory Insurance 2,300

Depreciation of machine 1,000

Salary supervisor 2,200

(4) To ensure that there is no interruption in production and sales, the company fixed the final
inventory of the direct material to be maintained is equivalent to 10% of the next month's
production requirement. Whereas for the final inventory of finished goods, the amount should be
equal to 5% of the next month's sales unit.

(5) Ending inventory information as at :

Finished goods Direct materials
(pack) (kg)
30 September 2020 1,000 1,000
31 December 2020 1,100 1,075

REQUIRED :

Provide the following budget for the forth quarter of 2020 with the amount.
(i) Sales Budget. [8 marks]
(ii) Production Budget. [13 marks]
(iii) Direct Materials Budget. [23 marks]
(iv) Direct Labor Budget. [13 marks]
(v) Manufacturing Overhead Budget. [23 marks]
Set B