MANAGEMENT ACCOUNTING

1.

Prepare the following budgets for 2012:

a) Sales budget (in units and RM)

Sales Quantity
Price/unit (RM)

Safiyya Sdn Bhd

Sales Budget for the year 2012
Q1
Q2
Q3
7,100
7,000
18,300
38
38
38
269,800
266,000
695,400

Q4
8,000
38
304,000

TOTAL
40,400
38
1,535,200

Sales Budget for the year 2012

20%

18%

17%

45%

COMMENTS:

Q1
Q2
Q3
Q4

b) Production budget (in units)

Safiyya Sdn Bhd

Production Budget for the year 2012
Q1

Q2

Q3

Q4

TOTAL

Quantity produced

7,100

7,000

18,300

8,000

40,400

Add: Closing stock

400

600

1,800

400

2,600

(400)

(600)

(1,800)

(2,200)

7,500

7,200

19,500

6,600

40,800

Less: Opening stock

Total Production Budget

Production Budget for the year 2012

16%

Q1

18%
18%

48%

Q2
Q3
Q4

COMMENTS:

c) Material usage and purchase budget for cotton cloth only. (In units and RM)

Safiyya Sdn Bhd

c) Material usage and purchase budget for the year 2012
Q1
Q2
Q3
Production unit
7,500
7,200
19,500
Direct Material per unit
1
1
1
Material usage
3,750
3,600
9,750
Add: Closing stock
850
1,450
2,200
Less: Opening stock
(850)
(1,450)
4,600
4,200
10,500
Purchase price (RM)
18
18
18
Total Material Purchase
82,800
75,600
189,000

Q4
6,600
1
3,300
2,100
(2,200)
3,200
18
57,600

Material Usage Budget for the year 2012

200000

RM

150000
100000
50000
0
Series1

COMMENTS:

Q1
67500

Q2
64800

Q3
175500

Q4
59400

MATERIAL PURCHASE BUDGET

200,000
150,000

RM

100,000
50,000
Series1

COMMENTS:

Q1
82,800

Q2
75,600

Q3
189,000

Q4
57,600

d) Direct labour budgets (in hours and RM)

Safiyya Sdn Bhd

Direct Labour Budget for the year 2012 (Cutting Department)
Q1
Q2
Q3
Production unit
7,500
7,200
19,500
Direct Labour per unit
0.30
0.30
0.30
Total Direct Labour Hour
2,250
2,160
5,850
Direct Labour Rate (RM)
9
9
9

Q4
6,600
0.30
1,980
9

Total Direct Labour Cost

52,650

17,820

Safiyya Sdn Bhd

Direct Labour Budget for the year 2012 (Sewing Department)
Q1
Q2
Q3
Production unit
7,500
7,200
19,500
Direct Labour per unit
0.25
0.25
0.25
Total Direct Labour Hour
1,875
1,800
4,875
Direct Labour Rate (RM)
7
7
7

Q4
6,600
0.25
1,650
7

Total Direct Labour Cost

11,550

20,250

13,125

19,440

12,600

34,125

RM

Direct Labour Budget for the year 2012

60000
50000
40000
30000
20000
10000
0
cutting

Q1
20250

Q2
19440

Q3
52650

Q4
17820

sewing

13125

12600

34125

11550

COMMENTS:

e) Manufacturing overhead budget

SAFFIYA SDN BHD

e) MANUFACTURING OVERHEAD BUDGET FOR THE YEAR ENDED 2012
OVERHEAD

TOTAL

Indirect Materials

Q1

Q2

Q3

Q4

12,150

2,484

2,268

5,670

1,728

4,800

1,200

1,200

1,200

1,200

21,600

5,400

5,400

5,400

5,400

1,200

300

300

300

300

Quality control

14,400

3,600

3,600

3,600

3,600

Supervisor salaries

18,000

4,500

4,500

4,500

4,500

Cutting Machine

3,000

750

750

750

750

Sewing Machine

8,960

2,240

2,240

2,240

2,240

11,250

2,813

2,813

2,813

2,813

Sewing machine

800

200

200

200

200

Cutting machine

440

110

110

110

110

3,750

938

938

938

938

18,000

4,500

4,500

4,500

4,500

8,550

2,138

2,138

2,138

2,138

126,900

31,172

30,956

34,358

30,416

Utilities
Electricity
Purchasing and material handling

Depreciation:

Building
Insurance:

Building
Maintenance
Interest on loan

RM

Manufacturing Overhead Budget for the year 2012

35000
34000
33000
32000
31000
30000
29000
28000
Series1

COMMENTS:

Q1
31172

Q2
30956

Q3
34358

Q4
30416

f)

Cash budget

SAFFIYA SDN BHD

f) CASH BUDGET FOR THE QUARTERS 1,2,3,AND 4
Q1
BALANCE b/d

Q2

Q3

Q4

113,380

214,731

502,023

RECEIPTS
SALES COLLECTION:
CASH 80%

215,840

212,800

556,320

243,200

CREDIT 20%

53,000

53,960

53,200

139,080

268,840

380,140

824,251

884,303

30,000

28,800

78,000

26,400

CASH 50%

41,400

37,800

94,500

28,800

CREDIT 50%

27,800

41,400

37,800

94,500

CUTTING DEPARTMENT

20,250

19,440

52,650

17,820

SEWING DEPARTMENT

13,125

12,600

34,125

11,550

2,484

2,268

5,670

PAYMENT
DIRECT MATERIAL:
AWNING
COTTON CLOTH

DIRECT WORKERS:

INDIRECT MATERIAL:
INDIRECT MATERIAL:
UTILITIES

1,200

1,200

1,200

1,200

ELECTRICITY

5,400

5,400

5,400

5,400

PURCHASING & MATERIAL

HANDLING
QUALITY CONTROL

300

300

300

300

3,600

3,600

3,600

3,600

SUPERVISOR SALARY

4,500

4,500

4,500

4,500

SEWING MACHINE

200

200

200

200

CUTTING MACHINE

110

110

110

110

BUILDING

938

938

938

938

MAINTENANCE

4,500

4,500

4,500

4,500

(-) INTEREST ON LOAN

2,138

2,138

2,138

2,138

155,460

165,409

322,228

207,625

113,380

214,731

502,023

676,678

INSURANCE:

BALANCE c/d

Cash Budget for the year 2012

RM

600,000
500,000
400,000
300,000
200,000
100,000
-

Q1
Receipt- cash (80%)
215,840
- credit (20%) 53000

Q2
212,800
53960

Q3
556,320
53200

Q4
243,200
139080

COMMENTS:

RM

Cash Budget for the year 2012

350,000
300,000
250,000
200,000
150,000
100,000
50,000
Payment

COMMENTS:

Q1
155,460

Q2
165,409

Q3
322,228

Q4
207,625

2.

Calculate production cost per unit using budgeted and actual data.

SAFFIYA SDN BHD

PRODUCTION COST PER UNITS
BUDGET
1 UNIT COST
COST/UNIT
1 UNIT

ACTUAL
COST
COST/UNIT

DIRECT MATERIAL
AWNING
COTTON CLOTH

1.00
0.50

RM4.00
RM18.00

RM4.00
RM9.00

1.00 RM4.00
0.50 RM18.00

RM4.00
RM9.00

DIRECT LABOUR
CUTTING DEPARTMENT
SEWING DEPARTMENT
OVERHEAD

0.30
0.25
1.00

RM9.00
RM7.00
RM2.96

RM2.70
RM1.75
RM2.96

0.30 RM10.00
0.25 RM7.00
1.00 RM2.89

RM3.00
RM1.75
RM2.89

TOTAL PRODUCTION
COST/ UNIT

COMMENTS:

RM20.41

RM20.64

3.

Calculate the break-even point for DSAFY (in units and RM).

BREAK- EVEN POINT (UNITS)

Fixed cost
Cn/ unit
126,900
(38 - 17.45)

6,175

BREAK- EVEN POINT (RM)

=
=
=

BEP (units) x sp
6175 x 38
RM234,650

Units

4.

The company plans to introduce a new design of hijab known as JAMEELA.

JAMEELA will be sold at RM45.00 per piece and its variable cost is 20% higher than
DSAFY. Calculate the break-even point (in units and RM).