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Problem - Modern Designs Sdn, Bhd. manufactures two main products for the retail industry, MD1 and MD2. The estimated sales of these two products for year 2020 are as follows:
Product
Quantity
Price/unit
MD1
13,000
RM60.00
MD2
17,000
RM80.00
Direct costs per unit in manufacturing the products are:
Material A
5 units
4 units
Material B
3 units
Wages per unit:
Skilled labours @ RM6.00 per hour
2 hours
3 hours
Unskilled labours @ RM4.00/hour
1 hour
Material A can be purchased at RM2.00 per unit while material B at RM3.00 per unit. The company expects no stocks in the beginning of the year but plans to maintain the following stocks at the end of the year:
MD1 11,000 units
MD2 13,000 units
Material A 20,000 units
Material B 18,000 units
Required -
a. Prepare the following budgets for the company:
i. Sales budget for product MD1 and MD2.
ii. Production budget for product MD1 and MD2.
iii. Material usage and material purchased budget.
iv. Labour budget.
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