Question
In: Accounting
QUESTION 4 A) A company sells product X & Y Sales for the year ended 2019...
QUESTION 4
A) A company sells product X & Y
Sales for the year ended 2019 are:
X: 5000 units @ ¢10 each
Y: 3000 units @ ¢12 each
The company expects to sell the following units in 2020:
X: 6000 units @ ¢15 each
Y: 4500 units @ ¢18 each
Additional information:
i) Budgeted opening stock:
X: 1000 units
Y: 800 units
Budgeted closing stock:
X: 2000 units
Y: 1500 units
ii) Materials A and B are used to produce products X and Y
based on the following ratio in order to produce one unit of X
& Y
Product Material A Material B
X 3kg2kg
Y 2kg1kg
Purchase price ¢10 per Kg ¢12 per kg
iii) Material A Material B
Opening stock 80005000
Closing stock60003500
(iv) The company has only one grade of labour and uses
✓ 3 hours to produce one unit of X
✓ 2 hours to produce one unit of Y
Labour rate would be ¢20 per hour
Required:
Prepare the following budgets for 2020
a. Sales budget [3 MARKS]
b. Production budget [3 MARKS]
c. Direct Material usage budget [3 marks]
d. Direct Material purchase budget [3 MARKS]
e. Direct labour budget [3 MARKS]
B) Discuss FIVE (5) benefits of budgeting to organisations.
[10 MARKS]
Solutions
Expert Solution
Answer to Question : A)
| Sales Budget:- | ||||
| Sales Budget | ||||
| Dec ,2019 | ||||
| Particulars | X | Y | Total | |
| Expected unit Sales(in units) | 6000 | 4500 | 10500 | |
| X Selling Price per unit | 15 | 18 | ||
| Total Sales Revenue | 90000 | 81000 | 171000 | |
| Production Budget:- | ||||
| Production Budget | ||||
| Dec ,2019 | ||||
| Particulars | X | Y | ||
| Budgeted Sales(in units) | 6000 | 4500 | ||
| Add: Desired FG Ending Inv. | 2000 | 1500 | ||
| Total Units needed | 8000 | 6000 | ||
| Less:Opening FG Inv. | (1,000) | (800) | ||
| Budgeted Production(in units) | 7,000 | 5,200 | ||
| Direct Material Usage Budget:- | ||||
| Direct Material Usage Budget:- | ||||
| Dec ,2019 | ||||
| Particulars | X | Y | Total | |
| Budgeted Production(in units) | 7000 | 5200 | ||
| Raw Material (A)required per unit | 3kg | 2kg | ||
| Total Raw Material (A)required | 21000 kg | 10400kg | 31400kg | |
| Raw Material (B)required per unit | 2kg | 1kg | ||
| Total Raw Material (A)required | 14000 kg | 5200 kg | 19200kg | |
| Direct Material Purchase Budget:- | ||||
| Direct Material Purchase Budget:- | ||||
| Dec ,2019 | ||||
| Particulars | X | Y | Total | |
| Raw Material(RM A):- | ||||
| Budgeted Production(in units) | 7000 | 5200 | ||
| Pounds per unit | x3 | x2 | ||
| RM 1 needed for production | 21000 | 10400 | 31400 | |
| Add: Desired Ending Inventory | 6000 | |||
| Total RM 1 needed | 37400 | |||
| Less: Beginning Inventory | (8,000) | |||
| Required purchase of RM A | 29,400 | |||
| Cost per pound | 10 | |||
| Budgeted Purchase, RM(A) | 294000 | |||
| Particulars | X | Y | Total | |
| Raw Material(RM B):- | ||||
| Budgeted Production(in units) | 7000 | 5200 | ||
| Pounds per unit | x2 | x1 | ||
| RM 1 needed for production | 14000 | 5200 | 19200 | |
| Add: Desired Ending Inventory | 3500 | |||
| Total RM 1 needed | 22700 | |||
| Less: Beginning Inventory | (5,000) | |||
| Required purchase of RM B | 17,700 | |||
| Cost per pound | 12 | |||
| Budgeted Purchase, RM(B) | 212400 |
| Direct Labor Budget | |||||
| Direct Labor Budget | |||||
| 2019 | |||||
| Particulars | X | Y | Total | ||
| Budgeted Production(in units) | 7000 | 5200 | |||
| Direct Labour Hrs per unit | x3 | x2 | |||
| Total Direct Labor Hours needed | 21000 | 10400 | 31400 | ||
 ekkarill92 answered 2 years agoRelated SolutionsBC Company sells three products, X, Y, and Z. During October, Product X had sales of...BC Company sells three products, X, Y, and Z. During October,
Product X had sales of $500,000; Product Y had sales totaling
$300,000; and Product Z reported sales of $200,000. ABC Company
as a whole reported total fixed costs of $443,000, a total
segment margin of $77,000, and a net income of $53,000.
The traceable fixed costs for Product X amounted to $80,000
during October and the traceable fixed costs for Product Z
were $60,000 in October.
Calculate the traceable...
Quiz 4 A manufacturer makes and sales four types of products: Product X, Product Y, Product Z,...Quiz 4
A manufacturer makes and sales four types of
products: Product X, Product Y, Product Z, and Product
W.
The resources needed to produce one unit of each product and the
sales prices are given in the following Table.
Resource
Product X
Product Y
Product Z
Product W
Steel (lbs)
2
3
4
7
Hours of Machine Time (hours)
3
4
5
6
Sales Price ($)
4
6
7
8
Currently, 4,600 pounds of steel and 5,000 machine hours are...
Quiz 4 A manufacturer makes and sales four types of products: Product X, Product Y, Product Z,...Quiz 4
A manufacturer makes and sales four types of
products: Product X, Product Y, Product Z, and Product
W.
The resources needed to produce one unit of each product and the
sales prices are given in the following Table.
Resource
Product X
Product Y
Product Z
Product W
Steel (lbs)
2
3
4
7
Hours of Machine Time (hours)
3
4
5
6
Sales Price ($)
4
6
7
8
Currently, 4,600 pounds of steel and 5,000 machine hours are...
Quiz 4 A manufacturer makes and sales four types of products: Product X, Product Y, Product Z,...Quiz 4
A manufacturer makes and sales four types of
products: Product X, Product Y, Product Z, and Product
W.
The resources needed to produce one unit of each product and the
sales prices are given in the following Table.
Resource
Product X
Product Y
Product Z
Product W
Steel (lbs)
2
3
4
7
Hours of Machine Time (hours)
3
4
5
6
Sales Price ($)
4
6
7
8
Currently, 4,600 pounds of steel and 5,000 machine hours are...
Norman Berhad sells two products; product X and product Y. The information about sales price, variable...Norman Berhad sells two products; product X and product Y. The
information about sales price, variable expenses and total fixed
expenses is given below:
Product X
Product Y
Selling price per unit
RM50
RM100
Variable expenses per unit
RM30
RM40
The total monthly fixed expenses of the company are RM 270,000.
Norman Berhad wants to generate a sales revenue of RM 1,000,000 in
the next month. To obtain this goal the company has the following
options:
Option 1: Sell 6,000...
We are analyzing 2 products – product X and product Y. Product X requires 4 Part...
We are analyzing 2 products – product X and product Y.
Product X requires 4 Part As and 3Part B’s.
Product Y requires 3 Part A’s and 2 Part B’s.
The standard cost for Part A is $24 per unit.
The standard cost for Part B is $12 per unit.
During this month, the company purchased 50,000 units of Part A
for $1,220,000 (there was no beginning balance).
During this month, the company purchased 50,000 units of Part B
for...
Income Statement Covid Company for the year ended December 31, 2019 shows sales revenue $6,000,000 and...Income Statement Covid Company for the year ended December 31,
2019 shows sales revenue $6,000,000 and COGS $3,800,000 . Accounts
receivable increased $250,000 during the year, and inventory
decreased $300,000. Accounts payable to suppliers of merchandise
decreased $450,000 during the year. Accrued expenses payable
decreased $90,000 during the year. Operating expenses include
depreciation expense of $1,600,000. Depreciation expense was
$100,000. Prepare Statement of Cash Flow Operating Activities
Section for Covid Company.
Company manufactures and sells a single product. The company's sales and expenses for last year follow:...Company manufactures and sells a single product. The company's
sales and expenses for last year follow:
LOADING...
(Click the icon to view the information.)Read the
requirements
LOADING...
.
Requirement 1. Fill in the missing numbers in the table. Use the
following questions to help fill in the missing numbers in the
table:
a. What is the total contribution margin?
The total contribution margin is
.
b. What is the total variable expense?
The total variable expense is
.
c. How...
The following information is for the Mulligan Company for 2019. The company sells just one product:...The following information is for the Mulligan Company for 2019.
The company sells just one product:
Description
Date
Units
Unit cost
Beginning Inventory
1/1
20
$58
Purchase:
2/12
50
$62
Purchase:
5/26
60
$64
Purchase:
6/15
70
$72
Sales:
3/18
60
Sales:
6/3
90
Mulligan Company sold products at a fixed price of $120 per unit
during this period.
Calculate gross profit for 2019 using the periodic method and
last-in, first-out method.
The gross profit is _____________. (provide a number...
Exercise 4-9 Martinez Company ended its fiscal year on July 31, 2019. The company’s adjusted trial...Exercise 4-9
Martinez Company ended its fiscal year on July 31, 2019. The
company’s adjusted trial balance as of the end of its fiscal year
is shown below.
Martinez Company
Adjusted Trial Balance
July 31, 2019
No.
Account Titles
Debit
Credit
101 Cash
$8,500
112 Accounts Receivable
8,800
157 Equipment
15,500
158 Accumulated Depreciation—Equip.
$7,800
201 Accounts Payable
4,700
208 Unearned Rent Revenue
2,500
311 Common Stock
17,700
320 Retained Earnings 25,400
332 Dividends
16,000
400 Service Revenue
63,000
429...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|