Reference no: EM132574990

Birkinsjaya Sdn. Bhd. is preparing budgets for the quarter ending September 30. Related information is shown as below:

1. Budgeted sales for the next few months are:

Month                                Units

May                           15,000

June                         20,000

July                            30,000

August                        40,000

September                     50,000

October                        35,000

November                        25,000

2. The selling price is RM12 per unit.

3. All sales are on credit and the collection methods are:

i. 50% collected in the month of sales

ii. 30% collected in the month following sales

iii. 20% collected in two month following sales

4. The management at Birkinsjaya Sdn. Bhd. determines the ending inventory in units to be equal to 20% of the following month's budgeted sales.

5. To produce one unit of output, 2 kilograms of direct material are needed.

6. Birkinsjaya decides to have direct materials on hand at 10,000 kilograms every month

7. Cost of direct material is estimated at RM1.50 per kg.

8. The payment of direct materials is below:

i. 50% purchases is paid in the month of purchase

ii. 50% purchases is paid in the following month of purchase

9. To produce one unit of output, 0.1 hours of direct labour are required.

10. Birkinsjaya pays RM8 per hour to its direct labour.

11. All wages are paid at the end of the month.

12. Manufacturing is divided into variable and fixed overhead.

13. Variable overhead is applied to each unit of output based on direct labour hours.

14. The variable overhead rate is RM10 per direct labour hour.

15. Fixed overhead is estimated at RM40,000 per month.

16. Ending finished goods inventory is made up from direct material, direct labour and manufacturing overhead.

17. Cost of Goods Sold is computed based on the unit production cost of RM5.79 per unit.

18. Selling and administrative cost is divided into variable and fixed components.

19. Variable selling and administrative cost is estimated at RM1.50 per unit sold.

20. Fixed selling and administrative cost is estimated at RM50,000 per month, where RM5,000 is the depreciation and it is not a cash expense.

21. Birkinsjaya has the following cash policy :

i. Minimum cash balance of RM50,000 is required for every month.

ii. Any deficiency of cash will be covered by loans with repayment in the following month.

iii. The interest on loan is charged at 15% per year.

iv. Purchased an equipment in August totalling RM150,000.

v. Cash balance on 1 July is RM55,000.

22. Birkinsjaya's account balances are as follows:

RM

Property ??458,047.50

Equipment ??150,200 (net)

Ordinary Shares ??500,000

Retained earnings ?335,777.50

Required:

Question 1: To prepare the master budget (sales budget up to budgeted Statement of Financial Position) for Birkinsjaya Sdn. Bhd. for July, August and September.???