Prepare the raw material usage and purchase budget

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Reference no: EM132819381

Raising Star Berhad manufactures a single product called Mac and it was sold in the market at the price of RM18 per unit. The marketing department of Raising Star Berhad has submitted the following sales forecast for the upcoming year 2021: Month Sales Demand Quarter 1 11,000 units Quarter 2 12,000 units Quarter 3 14,000 units Quarter 4 13,000 units The company expects to start the first quarter with 1,650 units in finished goods inventory. It is the company's policy to hold stocks of finished goods at the end of each quarter equals to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units. The beginning raw materials inventory for the first quarter is budgeted to be 1,400 kg. Each unit of Mac requires 2 kg of raw material that costs RM1.50 per kg. The management's policy is to hold ending inventory of raw materials equal to 10% of the following quarter's production needs. The desired ending raw material inventory for the fourth quarter is 1,500 units. In addition, the labour is paid at RM12.00 per hour and each unit of Mac requires production time of 30 minutes

Required:

Problem a. Prepare the sales budget of Raising Star Berhad for each quarter of the upcoming year 2021.

Problem b. Prepare the production budget of Raising Star Berhad for each quarter of the year 2021.

Problem c. Prepare the raw material usage and purchase budget of Raising Star Berhad for each quarter of the year 2021.

Problem d. Prepare the direct labour budget of Raising Star Berhad for each quarter of the year 2021

Reference no: EM132819381

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