QUESTION 1 ABC LTD. produces marble tiles for the local market. The raw materials required to produce 1 sq. meter is 10kg and the cost per kg is RM25. The production requirement for the month of January, February, March and April 2021 are 3,000; 3,600; 4,400 and 5,000 units respectively. The opening stock of raw materials for the month of January 2021 is 10,000 kg and the company normally holds the closing stock at the end of each month equals to 25% of the following month raw materials requirement. Required: (a) Prepare the Material Purchase Budget in value and quantity for ABC LTD. for the first quarter of 2021. (b) Explain FIVE (5) benefits of preparing the Material Purchase Budget
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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