Question details

Accounting Assignment A1
$ 40.00




1.   This assignment contains question that is set in English.


2.   Answer in English only.


3.   Your assignment should be typed using 12 point Times New Roman font and 1.5 line spacing.


4.   You must submit your hardcopy assignment to your Facilitator according to the due date.


5.   Your assignment should be prepared individually. You should not copy another person’s assignment. You should also not plagiarise another person’s work as your own.





This assignment accounts for 30% of the total marks for the course and shall be assessed based on

the Rubrics attached.











The purpose of this assignment is to enable students in understanding an organisation’s financial goals through the preparation of functional budgets that together integrate into a business plan.


Requirement: Budgets & Budgetory Controls























VIP Woods is a desk manufacturer. It makes two products, the ‘Executive desks’ and the ‘Chairman desks’. The budgeted information for each product for March 2017 is as follows: -


Standard material and labour costs:


Oak top (per square foot)                                                                            20

Red oak top (per square foot)                                                                     25

Oak legs (per leg)                                                                                         12

Red oak legs (per leg)                                                                                   18

Manufacturing labour cost per hour                                                           30




The standard material and labour usage for each product is as follows:



Executive desk

Chairman desk

Oak top

16 square feet


Red oak top


25 square feet

Oak legs



Red oak legs



Direct manufacturing labour

3 hours

5 hours







Other relevant data is as follows for March 2017: -


Direct material beginning inventory:



Executive desk



Chairman desk

Oak top (square feet)

Red oak top (square feet) Oak legs

Red oak legs











Direct materials ending inventory:



Executive desk



Chairman desk

Oak top (square feet)

Red oak top (square feet) Oak legs

Red oak legs











Finished goods inventory:



Executive desk               Chairman desk


Beginning inventory in units                                 20                                                5

Ending inventory in units                                      30                                                15


Manufacturing overhead (fixed and variable) is allocated to each desk on the basis of budgeted direct manufacturing labour hours. The budgeted variable manufacturing overhead rate for March

2017 is RM35 per direct manufacturing labour hour. The budgeted fixed manufacturing overhead for

March 2017 is RM42,500.


Budgeted sales for March 2017 are 740 units of the Executive desks and 390 units of the Chairman desks. The budgeted selling prices per unit in March 2017 are RM1,020 for the Executive desk and RM1,600 for the Chairman desk.



Prepare the following functional budgets for March 2017: -

a.   Sales budget                                                                                                                                 (3) b.   Production budget                                                                                                                        (4) c.   Direct materials usage budget                                                                                                     (4) d.   Direct materials purchase budget                                                                                                (4) e.   Direct manufacturing labour budget                                                                                            (4)

f.    Manufacturing overhead budget. Show also the calculation of the fixed manufacturing overhead


cost per hour and total manufacturing overhead cost per hour.



Highlight and discuss the importance of having budgets in an organisation.



(Total: 30 Marks)

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