SALES BUDGET 2007

CHILI

Q1 Q2 Q3
sales 25,000 32,500 48,750
x selling price (RM) 3.00 3.00 3.00
*75,000 97,500 146,250

TOMATO
Q1 Q2 Q3
sales 12,500 16,250 24,375
x selling price (RM) 3.20 3.20 3.20
*40,000 52,000 78,000

PRODUCT BUDGET 2007

CHILI
Q1 Q2 Q3

expected unit sold 25,000 32,500 48,750

(+ )closing stock 6,500 9,750 13,650
(−) opening stock (5,000) (6,500) (9,750)
expected unit to be produced 26,500 35,750 52,650

TOMATO
Q1 Q2 Q3
expected unit sold 12,500 16,250 24,375
(+ )closing stock 3,250 4,875 6,825
(−) opening stock (2,500) (3,250) (4,875)
expected unit to be produced 13,250 17,875 26,325

MATERIAL USAGE 2007 ( CHILI)

CHILI
Q1 Q2 Q3
expected unit produced 26,500 35,750 52,650
x usage per unit (kg) 0.02 0.02 0.02
total usage 530 715 1,053

SUGAR
Q1 Q2 Q3
expected unit produced 26,500 35,750 52,650
x usage per unit (kg) 0.16 0.16 0.16
total usage 4,240 5,720 8,424
 VINEGAR
Q1 Q2 Q3
expected unit produced 26,500 35,750 52,650
x usage per unit (liter) 0.04 0.04 0.04
total usage 1,060 1,430 2,106

MATERIAL USAGE 2007 ( TOMATO)

TOMATO
Q1 Q2 Q3
expected unit produced 13,250 17,875 26,325
x usage per unit (kg) 0.1 0.1 0.1
total usage 1,325 1,788 2,633

SUGAR
Q1 Q2 Q3
expected unit produced 13,250 17,875 26,325
x usage per unit (kg) 0.1 0.1 0.1
total usage 1,325 1,788 2,633

VINEGAR
Q1 Q2 Q3
expected unit produced 13,250 17,875 26,325
x usage per unit (liter) 0.01 0.01 0.01
total usage 133 179 263

MATERIAL PURCHASED 2007 ( CHILI)

CHILI
Q1 Q2 Q3
total usage 530 715 1,053
(+ )closing stock − − −
(−) opening stock − − −
quantity to be purchased 530 715 1,053
x RM per unit 11 11 11
purchase cost (RM) 5,830 7,865 11,583

SUGAR
Q1 Q2 Q3
total usage 4,240 5,720 8,424
(+ )closing stock 572 842 1,179
(−) opening stock (424) (572) (842)
quantity to be purchased 4,388 5,990 8,761
x RM per unit 1.60 1.60 1.60
purchase cost (RM) 7,021 9,584 14,017

VINEGAR
Q1 Q2 Q3
total usage 1,060 1,430 2,106
(+ )closing stock 143 211 295
(−) opening stock (106) (143) (211)
quantity to be purchased 1,097 1,498 2,190
x RM per unit 1.20 1.20 1.20
purchase cost (RM) 1,316 1,797 2,628

MATERIAL PURCHASED 2007 ( TOMATO)

TOMATO
Q1 Q2 Q3
total usage 1,325 1,788 2,633
(+ )closing stock − − −
(−) opening stock − − −
quantity to be purchased 1,325 1,788 2,633
x RM per unit 5.00 5.00 5.00
purchase cost (RM) 6,625 8,940 13,165

SUGAR
Q1 Q2 Q3
total usage 1,325 1,788 2,633
(+ )closing stock 179 263 369
(−) opening stock (133) (179) (263)
quantity to be purchased 1,372 1,872 2,738
x RM per unit 1.60 1.60 1.60
purchase cost (RM) 2,194 2,995 4,381

VINEGAR
Q1 Q2 Q3
total usage 133 179 263
(+ )closing stock 18 26 37
(−) opening stock (13) (18) (26)
quantity to be purchased 137 187 274
x RM per unit 1.20 1.20 1.20
purchase cost (RM) 165 224 329

MACHINE OPERATORS
CHILLI TOMATO

Expected unit Produced 188610 94305

x Direct labour time(minutes per unit) 0.2 0.9
TOTAL MINUTES CONSUMED 37722 84874.5
60 60
TOTAL HOURS CONSUMED 629 1415
Direct labour cost per hour 5.50 5.50
TOTAL LABOUR COST 3458 7780
TOTAL COST 11238
 Q4 * chilli formula :
68,250
3.00
204,750

Q1
Q4 Q2
34,125 Q3
3.20 Q4
109,200

* Tomato formula :

2008
Q4 Q1
Q1
68,250 95,550 Q2
19,110 Q3
(13,650) (19,110) Q4
73,710 188,610

2008
Q4 Q1
34,125 47,775
9,555
(6,825) (9,555)
36,855 94,305

Q4
73,710
0.02
1,474

Q4 2008
73,710 87,715
0.16 0.16
11,794 14,034
Q4 2008
73,710 87,715
0.04 0.04
2,948 3,509

Q4
36,855
0.1
3,686

Q4 2008
36,855 49,686
0.1 0.1
3,686 4,969

Q4 2008
36,855 49,686
0.01 0.01
369 497

Q4
1,474
−
−
1,474
11
16,214

Q4 2008
11,794 14034
1,403
(1,179) (1,403)
12,017
1.60
 19,228

Q4 2008
2,948 3509
351
(295) (351)
3,005
1.20
3,605

Q4
3,686
−
−
3,686
5.00
18,430

Q4 2008
3,686 4969
497
(369) (497)
3,814
1.60
6102

Q4 2008
369 497
50
(37) (50)
382
1.20
458

GENERAL PRODUCTION WORKERS

CHILLI TOMATO

188610 94305
 0.7 0.7
132027 66014
60 60
2200 1100
4 4
8802 4401
13203
 total sales RM240,000
quarter 4

» RM60,000

RM60,000 X 1.25% = RM75,000

RM75,000 X 1.30% = RM97,500
RM97,500 X 1.50% = RM146,250
RM146,250 X 1.40% = RM204,750

RM 128,000
4
» RM32,000

RM32,000 X 1.25% = RM40,000

RM40,000 X 1.30% = RM52,000
RM52,000 X 1.50% = RM78,000
RM78,000 X 1.40% = RM109,200
 DIRECT MATERIAL COST PER UNIT

100 BOTTLE OF CHILLI SAUCE

RM RM
Chilli/kg 2 10.00 20.00
Sugar/kg 16 1.40 22.40
Vinegar/litre 4 1.00 4.00
TOTAL PER 100 BOTTLE 46.40
100
FOR EACH BOTTLE (RM) 0.46

100 BOTTLE OF TOMATO SAUCE

RM RM
Tomato/kg 10.00 4.00 40.00
Sugar/kg 10.00 1.40 14.00
Vinegar/litre 1.00 1.00 1.00
TOTAL PER 100 BOTTLE 55.00
100
FOR EACH BOTTLE (RM) 0.55

DIRECT EXPENSES FOR EACH UNIT CHILLI AND TOMATO

RM
Bottle 0.40
Label 0.02
0.42

DIRECT LABOUR FOR EACH UNIT

MINUTES RM/HOUR TOTAL
CHILLI
Machine Operators 26/60 5.00 0.0217
General Production Workers 50/60 3.50 0.0292
0.0508

TOMATO
Machine Operators 1.1/60 5.00 0.0917
General Production Workers 0.50/60 3.50 0.0292
0.121
Activity Based Costing (ABC) Method

Total Overhead

ACTIVITIES DRIVER USE OF COST DRIVER PER PRODUCT

CHILLI TOMATO TOTAL
Process set-ups No. of set-up 100 125 225
Meterial procurement No. of purchase order 250 250 500
Maintenance No. of standard maintenance plan 5 5 10
Material Handling No. of material requisition 1500 1875 3375
Quality Control No. of quality inspection 100 50 150

manufacturing overhead

Fixed overhead

ACTIVITIES DRIVER USE OF COST DRIVER PER PRODUCT

CHILLI TOMATO TOTAL
Process set-ups No. of set-up 100 125 225
Meterial procurement No. of purchase order 250 250 500
Maintenance No. of standard maintenance plan 5 5 10
Material Handling No. of material requisition 1500 1875 3375
Quality Control No. of quality inspection 100 50 150

Variable overhead
(indirect labour and
indirect material)

ACTIVITIES DRIVER USE OF COST DRIVER PER PRODUCT

CHILLI TOMATO TOTAL
Process set-ups No. of set-up 100 125 225
Meterial procurement No. of purchase order 250 250 500
Maintenance No. of standard maintenance plan 5 5 10
Material Handling No. of material requisition 1500 1875 3375
Quality Control No. of quality inspection 100 50 150
% OF OVERHEAD COST OVERHEAD COST (RM) TOTAL
CHILLI TOMATO %x150000
30 100/225x45000 20000 25000 45000
20 15000 15000 30000
10 7500 7500 15000
30 20000 25000 45000
10 10000 5000 15000
150000 72500 77500 150000

Cost per unit 0.384 0.861

72500/189000
bottles

% OF OVERHEAD COST OVERHEAD COST (RM) TOTAL

CHILLI TOMATO %x140000
30 18666.67 23333.33 42000
20 14000 14000 28000
10 7000 7000 14000
30 18666.67 23333.33 42000
10 9333.33 4666.67 14000
140000 67666.67 72333.33 140000

Cost per unit 0.358 0.804

67666.67/189000 72333.33/90000

% OF OVERHEAD COST OVERHEAD COST (RM) TOTAL

CHILLI TOMATO %x10000
30 1333.33 1666.67 3000
20 1000 1000 2000
10 500 500 1000
30 1333.33 1666.666667 3000
10 666.67 333.33 1000
10000 4833.33 5166.67 10000

Cost per unit 0.026 0.057

2333.33/90000
 5) PRODUCTION COST PER UNIT

Chilli sauce Tomato sauce

RM RM
Direct material 0.464 0.55
Direct labor 0.051 0.121
Direct expenses 0.42 0.42
Prime cost 0.934 1.091
Variable ohd cost 0.026 0.057
Fixed ohd cost 0.358 0.804
TOTAL COST 1.319 1.952
7) SALES MIX SELLING PRICE
Chilli 561000 65.35% 3.30
Tomato 297500 34.65% 3.50
858500 100.00%

BREAK-EVEN POINT IN UNIT

FIXED COST WACM per unit

W1 404,240 2.3440

BREAK-EVEN POINT IN RM
SALES MIX BEP (unit)
Chilli 65.35% 112,701
Tomato 34.65% 59,756
100.00% 172,457

7) Break-even point when target profit is RM350,000

Target profit fixed cost WACM

350000 404240 2.344

SALES MIX BEP (unit)

Chilli 65.35% 211180
Tomato 34.65% 111973
100.00% 323153

SELLING PRICE ARE EXPECTED TO INCREASE BY 10%

Chilli Tomato
Selling Price 3.30 3.50
New Selling Price (1.10%) 3.63 3.85
Sales unit 170,000 85,000
Sales(RM) 617100 327250
weighted average contribution margin (WACM)
SALES MIXED SELLING PRICE
Chilli 617100 65.35% 3.63
Tomato 327250 34.65% 3.85
944350 100.00%

BREAK-EVEN POINT IN UNIT

FIXED COST WACM per unit
W1 404,240 2.68

BREAK-EVEN POINT IN RM
SALES MIX BEP (unit)
Chilli 65.35% 98,571
Tomato 34.65% 52,265
100.00% 150,836
 W1
(Add)

VARIABLE COST PER UNIT CONTRIBUTION MARGIN WACC PER UNIT (SALES MIX x WACC)
0.960 2.340 1.5290
1.148 2.352 0.8150
2.3440

BEP (unit)
172457

SELLING PRICE (RM) BEP (RM)

3.30 371,913
3.50 209146
581,059

BEP (UNIT)
323153

SELLING PRICE (RM) BEP (RM)

3.3 696894
3.5 391906
1088800

VARIABLE COST CM WACM

 0.96 2.67 1.74
1.15 2.7 0.94
2.68

BEP (unit)
150836

SELLING PRICE (RM) BEP (RM)

3.63 357,813
3.85 201220.25
559,033
 Fixed production overhead 140,000
selling+admin+ finance 264,240
404,240

(SALES MIX x WACC)

(target profit+fixed cost)

WACM

(350,000+404,240)
2.3340

754,240
2.3340
323153