You have just been hired as a new management trainee by Apex Sdn Bhd, a distributor of earrings to various retail outlets in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash.
Since you are well trained in budgeting, you have decided to prepare comprehensive budgets for the upcoming second quarter in order to show management the benefits that can be gained from an integrated budgeting program. To this end, you have worked with accounting and other areas in the company to gather the information assembled below.
The company sells many styles of earrings, but all are sold for the same price of RM10 per pair.
Prepare a master budget for the quarter ending 30 June include the following detailed budgets:
a) A sales budget, by month and in total
b) A schedule of expected cash collection from sales, by month and in total
c) A merchandise purchases budget in units and in RM. Show the budget by month and in total
d) A schedule of expected cash disbursements for merchandise purchases, by month and in total
e) A cash budget, by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of RM50,000
f) A budgeted income statement, using the contribution format, for the quarter ending 30 June
g) A budgeted balance sheet as at 30 June
a. What is the breakeven point in bottles and sales revenue of the company for each product based on the current sales mix?
b. Calculate the total profit earned if the company sells all the products produced.