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BUDGET 2011

DURHAM INCP9-2B

MAXAPROFIT

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OBJECTIVE

To seek approval for FY2011 budget as follows:-

Direct Material Purchase $3.94MDirect Labor $4.71MSelling & Administrative Expenses $4.26M

Total $10.79M

Profit After Tax $4.94M

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-Durham Inc is diversifying its business from production and manufacturing software product to the investment financing activities for international market in order to generate a steady and sustainable income in financial year 2011.

-Durham Inc will aggressively continue to pursue the 5 - Years Business Plan to assist the holding company to develop and produce new software product for the Information & Technology industry. Durham Inc also will develop and implement accelerated market entry and development plans. With this regards Durham Inc is projected $18.4M for the sales of their product (LN 35 & LN 40)

CORPORATE STRATEGIES FOR BUDGET 2011

- Durham Inc shall continue to pursue strategic alliances with home-grown , foreign company and also with complementary players to further develop the IT industry.

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Durham IncSales Budget

For The Year Ending December 31, 2011

Total Sales for the Year = $ 18, 400, 000

Product Code LN 35 LN 40Anticipated volume in units 400, 000 240, 000

Unit Selling Price ($) 25 35

Total Sales ($)10,000,00

08,400,00

0

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SALESSales Budget 2011 ($18.4M)

8,400,00046%

10,000,00054%

LN 35 LN 40

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Durham IncProduction Budget

For The Year Ending December 31, 2011

Product Code LN 35 LN 40Anticipated volume in units 400,000 240,000

AddDesired ending finished goods units 30,000 25,000

Total required units 430,000 265,000

Less Beginning finished goods units 20,000 15,000

Required production units 410,000 250,000

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PRODUCTION BUDGET Production Budget For 2011

($660K)

410,00062%

250,000 38% LN 35 LN 40

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Durham IncDirect Materials Budget

For The Year Ending December 31, 2011

Product Code LN 35 LN 40Required production units 410,000 250,000Direct Materials per unit (pounds) 2 3Total pounds needed for production 820,000 750,000

AddDesired ending direct materials (pounds) 50,000 20,000Total materials required 870,000 770,000

Less Beginning direct materials (pounds) 40,000 10,000Direct materials purchases 830,000 760,000Cost per pound ($) 2 3Total cost of direct materials purchases ($) 1,660,000

2,280,000

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DIRECT MATERIAL BUDGET

Direct Material Budget For 2011 ($4.6M)

1,660,00042%

2,280,000 58%

LN 35 LN 40

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Durham IncDirect Labor Budget

For The Year Ending December 31, 2011

Product Code LN 35 LN 40 Required production units 410,000 250,000 Direct Labor time (hours) per unit 0.50 0.75 Total required direct labor (hours) 205,000 187,500

Direct labor rate per hour ($) 12 12

Total direct labor cost 2,460,0002,250,00

0

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DIRECT LABOR BUDGET

Direct Labor Budget For 2011 ($4.7M)

2,460,00052%

2,250,000 48%

LN 35 LN 40

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OPERATION EXPENDITURE

OPEX

BUDGET

LN 35 LN 40 Total

A Direct Material 1.66M 2.28M 3.94M

B Direct Labor 2.46M 2.25M 4.71M

C Selling & Admin** 1.32M 0.82M 2.14M

TOTAL 5.44M 5.35M 10.79M

Remarks- Percentage Selling & administrative expenses based on required production unit 62:38

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OPERATION EXPENDITURE

RM '000

2,280

1660

2,2502,460

1,320

820

0

500

1000

1500

2000

2500

3000

LN 35 LN 40

Direct Material

Direct Labor

Selling &AdministrativeExpenses

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Durham IncBudgeted Income Statement

For The Year Ending December 31, 2011$

Sales 18,400,000

Cost of goods sold 9,200,000

Gross Profit 9,200,000

Selling & Administrative Expenses 2,140,000

Income before income taxes 7,060,000

Income tax expenses (30%) 2,118,000

Net Income 4,942,000

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THANK YOU