Question
In: Accounting
Case Study Budgeting XY Ltd plans to sell the following: Months Product A (units) June 1200...
Case Study
Budgeting
XY Ltd plans to sell the following:
|
Months |
Product A (units) |
|
June |
1200 |
|
July |
1800 |
|
August |
2800 |
|
September |
3200 |
|
October |
3200 |
Stock of finished goods at 1 June was 240 units and the company’s stockholding policy for the finished goods stock at the end of each month to represent 20% of the following month’s sales requirement. Each unit of product A uses two units of a component X1. On 1 June there were expected to be 264 units of X1 in stock. The desired closing stock of X1 is 10% of the next month’s production.
Each unit of component X1 costs $5.
Each unit of product A requires $6 of labor.
Fixed administration overheads in each month are budgeted to be $5000 (and include a charge of $1000 depreciation). Product A can be sold for $26 each.
Labor and fixed overheads are paid in the same month. Trade receivables (trade debtors) take two months to pay and the company pays its trade payables (trade creditors) after one month. The opening cash balance is $10000.
Required:
" with step by step calculation please "
- The production budget in units for June July and August
- The production cost budget for June July and August
- The raw material purchase budget (in units and $) for June, July and august.
Solutions
Expert Solution
| Production budget (in units) | |||
| June | July | August | |
| Sales | 1,200 | 1,800 | 2,800 |
| Less: Opening stock | (240) | (360) | (560) |
| Add: Closing stock | 360 | 560 | 640 |
| Production budget (in units) | 1,320 | 2,000 | 2,880 |
Working-
| Production budget (in units) | |||
| June | July | August | |
| Sales | 1200 | 1800 | 2800 |
| Less: Opening stock | -240 | =-B196 | =-C196 |
| Add: Closing stock | =1800*20% | =2800*20% | =3200*20% |
| Production budget (in units) | =SUM(B194:B196) | =SUM(C194:C196) | =SUM(D194:D196) |
| Production budget (in amount) | |||
| June | July | August | |
| Component X1 | $13,200 | $20,000 | $28,800 |
| Labor | $7,920 | $12,000 | $17,280 |
| Fixed administration overheads | $5,000 | $5,000 | $5,000 |
| $26,120 | $37,000 | $51,080 |
Working-
| Production budget (in amount) | |||
| June | July | August | |
| Component X1 | =1320*10 | =2000*10 | =2880*10 |
| Labor | =1320*6 | =2000*6 | =2880*6 |
| Fixed administration overheads | 5000 | 5000 | 5000 |
| =SUM(B205:B207) | =SUM(C205:C207) | =SUM(D205:D207) |
| Raw material purchase budget(units) | ||||
| June | July | August | ||
| Production | 2,640 | 4,000 | 5,760 | (production units * 2 units of component X1) |
| Less: Opening stock | (264) | (400) | (576) | |
| Add: Closing stock | 400 | 576 | 640 | (Raw material for production for next month *10%) |
| Raw material purchase (in units) | 2,776 | 4,176 | 5,824 |
Working-
| Raw material purchase budget(units) | ||||
| June | July | August | ||
| Raw material for Production | =1320*2 | =2000*2 | =2880*2 | (production units * 2 units of component X1) |
| Less: Opening stock | -264 | =-B214 | =-C214 | |
| Add: Closing stock | =4000*10% | =5760*10% | =(3200*2)*10% | (Raw material for production for next month *10%) |
| Raw material purchase (in units) | =SUM(B212:B214) | =SUM(C212:C214) | =SUM(D212:D214) |
| Raw material purchase budget(amount) | ||||
| June | July | August | ||
| Raw material purchase (in units) | 2,776 | 4,176 | 5,824 | (a) |
| Per unit cost | $5 | $5 | $5 | (b) |
| Raw material purchase budget(amount) | $13,880 | $20,880 | $29,120 | (a*b) |
ekkarill92 answered 1 year agoRelated Solutions
Stut Corporation, a retailer, plans to sell 28,000 units of Product X during the month of...
Stut Corporation, a retailer, plans to sell 28,000 units of
Product X during the month of August. If the company has 6,000
units on hand at the start of the month, and plans to have 9,000
units on hand at the end of the month, how many units of Product X
must be purchased from the supplier during the month?
25,000
31,000
28,000
37,000
A. Weed Master Company plans to sell 200,000 units of finished product in July and anticipates...
A. Weed Master Company plans to sell 200,000 units of finished
product in July and anticipates a growth rate in sales of 5 percent
per month. The desired monthly ending inventory in units of
finished product is 80 percent of the next month’s estimated sales.
There are 160,000 finished units in inventory on May 31. Each unit
of finished product requires four pounds of raw material at a cost
of $1.15 per pound. There are 700,000 pounds of raw material...
Greener Grass Fertilizer Company plans to sell 240,000 units of the finished product in July and...
Greener Grass Fertilizer Company plans to sell 240,000 units of
the finished product in July and anticipates a growth rate in sales
of 4 percent per month. The desired monthly ending inventory in
units of finished product is 85 percent of the next month’s
estimated sales. There are 204,000 finished units in inventory on
June 30. Each unit of finished product requires four pounds of raw
material at a cost of $1.95 per pound. There are 830,000 pounds of
raw...
Greener Grass Fertilizer Company plans to sell 240,000 units of the finished product in July and...
Greener Grass Fertilizer Company plans to sell 240,000 units of
the finished product in July and anticipates a growth rate in sales
of 4 percent per month. The desired monthly ending inventory in
units of finished product is 85 percent of the next month’s
estimated sales. There are 204,000 finished units in inventory on
June 30. Each unit of finished product requires 5 pounds of raw
material at a cost of $1.95 per pound. There are 830,000 pounds of
raw...
Greener Grass Fertilizer Company plans to sell 270,000 units of finished product in July and anticipates...
Greener Grass Fertilizer Company plans to sell 270,000 units of
finished product in July and anticipates a growth rate in sales of
6 percent per month. The desired monthly ending inventory in units
of finished product is 75 percent of the next month’s estimated
sales. There are 202,500 finished units in inventory on June 30.
Each unit of finished product requires 3 pounds of raw material at
a cost of $1.95 per pound. There are 740,000 pounds of raw material...
Greener Grass Fertilizer Company plans to sell 270,000 units of finished product in July and anticipates...
Greener Grass Fertilizer Company plans to sell 270,000 units of
finished product in July and anticipates a growth rate in sales of
5 percent per month. The desired monthly ending inventory in units
of finished product is 80 percent of the next month’s estimated
sales. There are 216,000 finished units in inventory on June 30.
Each unit of finished product requires 4 pounds of raw material at
a cost of $1.35 per pound. There are 800,000 pounds of raw material...
1- Swansong plans to sell 10,000 units of a particular product during July, and expects sales...
1-
Swansong plans to sell 10,000 units of a particular product
during July, and expects sales to increase at the rate of 10% per
month during the remainder of the year. The June 30 and September
30 ending inventories are anticipated to be 950 units and 1,100
units, respectively. On the basis of this information, how many
units should Swansong purchase for the quarter ended September
30?
Select one:
a. 32,950 units
b. 33,250 units
c. 31,850 units
d. 34,750...
Greener Grass Fertilizer Company plans to sell 300,000 units of finished product in July and anticipates...
Greener Grass Fertilizer Company plans to sell 300,000 units of
finished product in July and anticipates a growth rate in sales of
5 percent per month. The desired monthly ending inventory in units
of finished product is 80 percent of the next month’s estimated
sales. There are 240,000 finished units in inventory on June 30.
Each unit of finished product requires 4 pounds of raw material at
a cost of $1.45 per pound. There are 710,000 pounds of raw material...
Greener Grass Fertilizer Company plans to sell 250,000 units of finished product in July and anticipates...
Greener Grass Fertilizer Company plans to sell 250,000 units of
finished product in July and anticipates a growth rate in sales of
3 percent per month. The desired monthly ending inventory in units
of finished product is 85 percent of the next month’s estimated
sales. There are 212,500 finished units in inventory on June 30.
Each unit of finished product requires 5 pounds of raw material at
a cost of $1.15 per pound. There are 800,000 pounds of raw material...
Greener Grass Fertilizer Company plans to sell 270,000 units of finished product in July and anticipates...
Greener Grass Fertilizer Company plans to sell 270,000 units of
finished product in July and anticipates a growth rate in sales of
5 percent per month. The desired monthly ending inventory in units
of finished product is 90 percent of the next month’s estimated
sales. There are 243,000 finished units in inventory on June 30.
Each unit of finished product requires 6 pounds of raw material at
a cost of $1.35 per pound. There are 720,000 pounds of raw material...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- UNIX ONLY -- DIFFICULT LAB ASSIGNMENT This is an extremely difficult subject for me. Could you...
- Do you know why your credit card can be refused even though you are profitable?
- The Following Java expression: S/10 * 10 + 10 – S = C Show that this...
- Year Cash Flow 0 −$9,700 1 5,800 2 2,500 3 3,400 &nb
- In a two – story building, an exterior column is to be designed for a service...
- Explain the use of neural networking modeling in predictive analytics. Discuss a real-life example of where...
- Boarder line and antisocial disorder are perhaps the most research personality disorder.What are the most common...
ADVERTISEMENT