The managers forecasted that 100,000 bikes would be sold at a price of RM800 each. 2. According to the prior accounting records, beginning finished goods inventory consists of 2,500 bikes at a cost per unit of RM454.75, or RM1,136,875 in total. Given the anticipated increase in sales volume, the managers want to increase finished goods inventory to 3,500 units. 3. Beginning direct materials inventory consists of: Wheels and tyres Components Frames Total RM 20,000 70,000 50,000 140,000 4. The cost per unit of direct material is expected to be: RM BMAC5203(1)/JAN18/A-NK PURPOSE REQUIREMENT Wheels and tyres Components Frames 5. The managers want ending inventories to be: Wheels and tyres Components Frames Total 20 70 50 RM 25,000 87,500 62,500 175,000 3 6. The quantity and cost of direct labour per unit is expected to be: Direct labour Assembly Testing Hours Cost per hour 1.5 RM25 0.15 RM15 7. For overheads, you use information that you collected from last year’s operations and update it with current prices. The variable manufacturing overhead cost per unit is expected to be as follows: Variable manufacturing overhead (cost per unit): RM BMAC5203(1)/JAN18/A-NK Supplies Indirect labour Maintenance Miscellaneous Total 20.00 37.50 10.00 _7.50 75.00 8. You expect a total of RM20,200,000 to be spent on fixed manufacturing overhead costs as follows: Depreciation: RM4,040,000; Property taxes: RM1,010,000; Insurance: RM1,414,000; Plant supervision: RM5,050,000; Fringe benefits: RM7,070,000; Miscellaneous: RM1,616,000. Overheads are absorbed by budgeted volume of production. 9. You also estimate other operating costs for all the support departments. All support costs for Sepang Bikes happen to be fixed as follows: Administration: RM16,478,215; Marketing: RM9,886,929; Distribution: RM4,943,465; Customer service: RM1,647,821. 10. Income taxes are expected to be at the rate of 30%. Required: a. As the accountant at Sepang Bikes, develop a master budget for the review of the entity’s controller, so that it can then be presented at a meeting with the CEO and the various department heads. Create individual /functional budgets in the following order: i. Sales budget ii. Production budget iii. Direct materials usage and purchases budget iv. Direct labour budget v. Manufacturing overhead budget vi. Ending inventories budget vii. Cost of goods sold budget viii. Support department budget ix. Budgeted statement of profit or loss (22) b. Briefly explain FOUR (4) importance of cash budgets and how these are related to organisational strategy.