Answered: prepare Direct Labor Budget

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Siti runs a small factory in Kuala Pilah producing banana chips. She normally sells 10,000 packets at RM5.00 per packet. She is now planning for next month’s sales and the following information is given:
Raw material required is 1000 kg of bananas at RM1.30 per kg. The labor rate is RM3.00 per hour and each packet of banana chips takes 0.25 hours to make. Manufacturing overheads are charged at RM0.80 per packet. The following stock levels are maintained:
Opening stock
Raw materials 100 kg Banana chips 80 packets
Closing stock
120 kg
70 packets

Required:
For the month ending 31 March 2018, prepare Direct Labor Budget

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