AHMADFINANCE, Inc. Ahmad’s company manufactures coffee that sells for RM7.00. Each coffee requires 0.5gm of brewed coffee, which a total cost 1.00 in direct materials that exclude an opening mechanism that company purchases from supplier at a cost of $2.00 each. Each coffee takes approximately 55 minutes to produce, and the labor rate averages RM3.00
Forecasted unit sales for the 2010 upcoming months as follows:
| January | 40,000 |
| February | 50,000 |
| March | 45,000 |
| April | 35,000 |
| May | 60,000 |
| June | 56,000 |
• Ahmadfinance’s ending finished goods inventory policy is 30% of the next month’s sales
• Ending raw materials inventory policy is 20% of the next month’s production
• Variable manufacturing rate is $0.50 per unit produced
• Annual manufacturing expense which is not vary with level of production is estimated to be $15000 for an expected production of 30000 units for the year
• Nonmanufacturing expenses are forecasted at $1000 per month
• Selling and administrative expenses are $0.80 per unit sold
• Beginning finished goods inventory for 2009 was 10000
• Beginning raw materials inventory for 2009 was 50000
• Unit sales for July will be expected to increase 20% from June’s unit sales
• Ahmad predicts that total material needed for production will be 500000
Required:
Prepare the following for AhmadFinance for each month
1. Sales budget
2. Production budget
3. Raw materials purchases budget
4. Direct labor budget
5. Manufacturing overhead budget
6. Budgeted COGS
7. Selling and administrative expenses budget
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