Q.1 The budget department of ABC Ltd., gathered the following information for preparing its budgets for...

Q.1 The budget department of ABC Ltd., gathered the following information for preparing its budgets for forthcoming period. 1. Sales forecast. Product Sales Quantity Selling price Inventories 01-01-2019 31-12-2019 Product-A 30,000 units Rs. 30 per unit. 5,000 units 10,000 units Product-B 40,000 units Rs. 40 per unit. 10,000 units 15,000 units Materials Purchase budget. 2. Material Product Inventories A B 01-01-2019 31-12-2019 Price per kg Materials-X 2kg 1kg 25,000kg 30,000kg Rs.2.0 Materials-Y 1kg 3kg 10,000 kg 15,000 kg Rs.1.0 3. Labor budget. Hour per unit Rate per hour Product –A 2 hours Rs 5 per hour Product-B 3 hours Rs. 4 per hour 1/4 4. Factory Overhead Factory overhead rate is Rs.2 per direct labor hour. Required:- (Marks-08) a. Prepare Sales budget product wise and total. b. Production budget in quantity product wise and total. c. Purchase budget in quantity and Rupees. d. Labor cost budget Rupees. e. Factory overhead budget Rupees. f. Manufacturing cost per unit of product-A, B and C. g. Discuss the behavioral issues that you may face while implementing budgeting in Pakistani environment. (Marks-02)

Expert Solution

Hello,

I have solved this question by using budgeting concept, budgets are prepared as per requirements of the question. Sales budget prepared by multiplying sales price with quantity sold, the production budget is prepared by doing inventory adjustments. The purchase budget of material prepare by calculating material consumed by product A and B.

Any doubts in solution are welcome

ekkarill92 answered 1 year ago

Q 1 The accountant for Kadhim Inc. is preparing the budgets for operating department support service...

Q 1 The accountant for Kadhim Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments Maintenance Cafeteria Cutting Packaging Direct costs SAR50,000 SAR45,000 SAR275,000 SAR300,000 Number of employees 15 10 150 250 Square feet 1,500 2,000 3,500 4,000 If the direct method is used, calculate...

Ilona Ltd is preparing its cash budget for May. The following information is available regarding the...

Ilona Ltd is preparing its cash budget for May. The following information is available regarding the monthly collection history of the company: Current month’s sales collections 30% Prior month’s sales collections 58% 2 months’ prior sales collections 6% 3 months’ prior sales collections 4% The remaining 2% is not collected and the company writes it off as bad debt. Credit sales to date are as follows: February R410 000 March R295 000 April R385 000 May R400 000 The total...

Budgets: Discussion question RD Ltd. is in the process of preparing its budgets for 2020. The...

Budgets: Discussion question RD Ltd. is in the process of preparing its budgets for 2020. The company produces and sells a single product, Z, which currently has a selling price of £100 for each unit. The budgeted sales units for 2020 are expected to be as follows: Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec 5,000 5,500 6,000 6,000 6,250 6,500 6,250 7,000 7,500 7,750 8,000 7,500 The company expects to sell 7,000 units in January...

ABC Ltd. Furnishes the following particulars for preparation of its budgets for the year 2019 Particulars...

ABC Ltd. Furnishes the following particulars for preparation of its budgets for the year 2019 Particulars Amount (AED) Sale of Pens 8,000,000 Sale of Copy 2,000,000 Direct Material Cost 4% of sales Direct Wages 100,000 Remuneration of factory manager 1,000 per month Stores and spares 1% on sales Depreciation on plant and machinery 2,000 Light and power 5,000 Factory repairs and maintenance 6,000 Other factory expenses 1 % on direct wages Administrative, selling and distribution expenses...

Gunnar Company gathered the following reconciling information in preparing its September bank reconciliation. Calculate the adjusted...

Gunnar Company gathered the following reconciling information in preparing its September bank reconciliation. Calculate the adjusted cash balance per books on September 30. Cash balance per books, September 30 $ 3,181 Deposits in transit 421 Notes receivable and interest collected by bank 888 Bank charge for check printing 29 Outstanding checks 1,347 NSF check 144 a.$2,970 b.$3,896 c.$2,255 d.$3,114 Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Mathers Co. for July: Cash balance...

Papst Company is preparing its cash budget for the month of May. The following information is...

Papst Company is preparing its cash budget for the month of May. The following information is available concerning its accounts receivable (based on sales made to customers on open account): Actual credit sales for March $ 130,000 Actual credit sales for April $ 160,000 Estimated credit sales for May $ 210,000 Estimated collections in the month of sale 25 % Estimated collections in the first month after the month of sale 60 % Estimated collections in the second month after...

HammerTime is preparing their 2019 budget. They want to look at static budgets and flexible budgets...

HammerTime is preparing their 2019 budget. They want to look at static budgets and flexible budgets to determine which is best for them. They estimate sales/production will be between 2,000,000 and 4,000,000 boxes of nails per month. They want to be able to understand their budget variances as well. Question 1: Prepare some budgets in Excel for HammerTime. a) Show the static budget based on 3,000,000 units (boxes) produced. b) Show the flexible budget based on 2,000,000 units (boxes) produced....

Derek Company gathered the following reconciling information in preparing its September bank reconciliation: Cash balance per...

Derek Company gathered the following reconciling information in preparing its September bank reconciliation: Cash balance per books, 9/30 $2,190 Deposits in transit 572 Notes receivable and interstate's collected by bank. 879 Bank charge for check printing 29 Outstanding checks 1,322 NSF 178 Find the adjusted cash balance per books on September 30. Select the correct answer. $2,862 $2,112 $1,440 $2,290

ABC Limited is preparing its departmental budgets and product cost estimates for the year ending 31...

ABC Limited is preparing its departmental budgets and product cost estimates for the year ending 31 December 20X1. The company has three manufacturing departments – Machining, Assembly and Finishing – together with a production maintenance department. The following costs and related data have been estimated for the year to 31 December 20X1: Costs Machining Assembly Finishing Maintenance Total Direct wages 60 32 72 30 194 Indirect wages 10 6 8 - 24 Direct materials 80 10 4 - 94 Indirect...

P9.29 Sales and labour budgets: university Perth Business University (PBU) is preparing its budget for the...

P9.29 Sales and labour budgets: university Perth Business University (PBU) is preparing its budget for the upcoming academic year. This is a specialised private university that charges fees for all degree courses. Currently, 15 000 students are enrolled on campus. However, the university is forecasting a 5 per cent growth in student numbers in the coming year, despite an increase in fees to $3000per subject. The following additional information has been gathered from an examination of university records and conversations...

Question