Question

Task 1

COCO Co. is a manufacturing company. It manufactures 2 products, known as ‘A’ and ‘Z’. The following information is given for the year 2017: -

The standard direct materials and direct labour used for each product is as follows:

                             ‘A’                         ‘Z’

Material 1          10 units                8 units

Material 2         5 units                  9 units

Direct Labour   10 hours           15 hours

Standard direct materials and direct labour costs:

Material 1                8.20 per unit

Material 2               17.00 per unit

Direct Labour         14.00 per hour

Other important data is as follows for the year 2017:

                                                                     Direct material

                                                             Material 1          Material 2

Opening inventory (units)                   9,000               8,500

Closing inventory required (units)    10,000              2,000

           Finished product

                                                                                 ‘A’                         ‘Z’

Forecast sales (units)                                         8,500                   1,600

Selling price per unit                                          $ 500                  $ 660

Ending inventory required (units)                    2,000                  100

Beginning inventory (units)                                 200                      90

Required:

Prepare the following budgets for the year 2017: -

(a) Sales budget                      

(b) Production budget                              

(c) Direct materials usage budget                                           

(d) Direct materials purchase budget                             

(e) Direct labour budget                                   

Answer 1