Question

Mokunt (Pty) Ltd have the following information in their books, which they want to use for planning purposes for 2019. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted Sales in units 50000 70000 90000 120000 Desired ending inventory of finished goods 10000 14000 18000 24000 Opening inventory of finished goods 7000 10000 14000 18000 Direct labour hour used per unit 0.5 0.5 0.5 0.5 Selling Price (BWP) 10 10 10 10 Direct labour cost per hour (BWP) 3 3 3 3 a. Prepare the following budgets: i. Sales budget ii. Production budget. iii. Direct labour budget iv. Give five kinds of costs that you learnt in this course.

Answer 1

Solution i:

Sales Budget - Mokunt (Pty) Ltd
Particulars	Q1	Q2	Q3	Q4	Total
Sales units	50000	70000	90000	120000	330000
Selling price per unit	$10.00	$10.00	$10.00	$10.00	$10.00
Projected Sales Revenue	$500,000.00	$700,000.00	$900,000.00	$1,200,000.00	$3,300,000.00

Solution ii:

Production Budget - Mokunt (Pty) Ltd
Particulars	Q1	Q2	Q3	Q4	Total
Sales units	50000	70000	90000	120000	330000
Add: Desired ending inventory	10000	14000	18000	24000	24000
Less: Opening Inventory	7000	10000	14000	18000	7000
Budgeted Production units	53000	74000	94000	126000	347000

Solution iii:

Direct Labor Budget - Mokunt (Pty) Ltd
Particulars	Q1	Q2	Q3	Q4	Total
Budgeted Production Units	53000	74000	94000	126000	347000
Direct labor hours per unit	0.5	0.5	0.5	0.5	0.5
Direct labor hour required	26500	37000	47000	63000	173500
Rate per direct labor hours	$3.00	$3.00	$3.00	$3.00	$3.00
Budgeted direct labor cost	$79,500.00	$111,000.00	$141,000.00	$189,000.00	$520,500.00

Solution iv:

five kinds cost are as under:

1. Direct material

2. Direct labor

3. Factory overhead

4. Selling cost

5. Administrartive cost

Apart from this, above cost can be classified in product cost or period cost and further classification into variable cost and fixed costs.