Question

In: Accounting

Case Study 3 Khalid LLC Trading Company has produced 12,500 units which is 25% capacity level...

Case Study 3

Khalid LLC Trading Company has produced 12,500 units which is 25% capacity level in the factory. The company has used raw material to make the production worth of RO 33 per unit. The company has incurred direct labour cost at RO 31per unit along with direct expenses RO 29 per unit. The company spent RO 122,500 on fixed expenses in the factory with per unit cost of RO 9.8. Other factor expenses for the total production of 12,500 units has arrived at RO 13 per unit. Administration expenses were incurred RO 14 per unit out of which fixed expenses belongs to 40%. Company has appointed a salesman for selling the products produced in the company at RO 15 per unit produced out of which 25% belongs to fixed. The company has also incurred distribution expenses of RO 16 per unit out of which 30% are variable.

Requirements: The company has approached the you and ask to prepare the flexible budgets for two more required capacity levels; -

  1. 15,000 units.                                                                                                        [2.5 Marks]
  2. 17,000 units.                                                                                                      [5 Marks]

Case Study 4

Ameer Trading Company is dealing in different kinds of buying and selling of electronics products to vast range of customers in Sohar region and provided the following data to understand the cash position every month start from January to July. The sales book reported the sales amount for seven months as below: -

January

February

March

April

May

June

July

325,000

320,000

319,000

345,000

365,000

326,500

314,500

The sales reported every month including cash sales and credit sales. Cash sales constitute 40% of total sales collected in the month of sales and the balance is credit sales received in the month following the month of sales.

The detail of goods purchased in cash during seven months reported in purchase book as below: -

January

February

March

April

May

June

July

26,500

28,500

29,500

27,500

23,500

24,800

22,000

Company also purchased goods on credit from different suppliers. The detail of credit purchase from the month January to July is given below: -

January

February

March

April

May

June

July

125,000

111,600

126,500

145,600

132,500

115,000

116,000

Cash purchases payable in the month of purchases and credit purchases are payable to supplier in two months following the month of credit purchase.

It is also found from the accounting records that the company has purchased a plant and equipment for RO 22,000 in March and it is payable in two equal instalments starting from April. Tax department has sent a notice to the company to pay taxes of RO 6,750 each in the month of May and June.

The wages and office expenses are paid in the month following the month in which wages and office expenses incurred. The detail of wages and office expenses is given below: -

January

February

March

April

May

June

July

Wages

2,250

2,200

2,150

2,650

2,350

2,450

2,260

Office Expenses

3,300

3,150

3,250

3,160

3,160

3,280

3,120

The selling expenses of the company recorded for the seven months are as follows: -

January

February

March

April

May

June

July

1,250

1,650

1,450

1,680

1,290

1,780

1,500

The company also incurred administrative expenses for the period January to July. The detail of administrative expenses is given as below: -

January

February

March

April

May

June

July

1,600

1,650

1,750

1,650

1,890

1,990

2,020

The company is paying the selling and administration expenses in two months following the month in which such expenses incurred.

The cash balance as on 1st April is RO 47,800.

Requirement: The Company has requested you to prepare Cash budget for the period of April to June.                                                                                                                               [10 Marks]

Solutions

Expert Solution


Related Solutions

Case Study 3 Khalfan LLC Trading Company has produced 35,000 units which is 17.5% capacity level...
Case Study 3 Khalfan LLC Trading Company has produced 35,000 units which is 17.5% capacity level in the factory. The company has used raw material to make the production worth of RO 48 per unit. The company has incurred direct labour cost at RO 39 per unit along with direct expenses RO 37 per unit. The company spent RO 120,500 on fixed expenses in the factory with per unit cost of RO 3.4428. Other factor expenses for the total production...
Mohammed LLC Trading Company has produced 15,000 units which is 50% capacity level in the factory....
Mohammed LLC Trading Company has produced 15,000 units which is 50% capacity level in the factory. The company has used raw material to make the production worth of RO 65 per unit. The company has incurred direct labour cost at RO 32 per unit along with direct expenses RO 25 per unit. The company spent RO 150,000 on fixed expenses in the factory with per unit cost of RO 10. Other factor expenses for the total production of 15,000 units...
Johnson Corporation has an expected monthly capacity of 9,000 units but only 5,700 units were produced...
Johnson Corporation has an expected monthly capacity of 9,000 units but only 5,700 units were produced and 6,000 direct labor hours were used during August due to Covid-19. The actual variable overhead for August was $48,165, and the actual fixed overhead was $140,220. Standard cost data follow: Standard cost per unit (One unit Takes one Labor Hour) Direct materials $9.00 Direct labor 15.00 Variable overhead 8.00 Fixed overhead 16.00 Total $48.00 1) What is the Variable Manufacturing Overhead Spending Variance?...
Case Study 4 Husam Trading Company is in the business of buying and selling of different...
Case Study 4 Husam Trading Company is in the business of buying and selling of different types of electronics products in Nizwa region and provided the following data to understand the cash position every month start from January to July. The sales book reported the sales amount for seven months as below: - January February March April May June July 125,000 135,000 148,200 175,800 125,900 129,100 115,200 The sales reported every month including cash sales and credit sales. Cash sales...
Case Study Gamma Company manufactures soft drinks. Its manufacturing plant has the capacity to produce 10,000...
Case Study Gamma Company manufactures soft drinks. Its manufacturing plant has the capacity to produce 10,000 cases each month; current production and sales are 7,500 cases per month. The company normally charges $150 per case. Cost information for the current activity level is as follows: Variable costs that vary with units produced Direct materials ---------------------------------------------$ 262,500 Direct manufacturing labour -------------------------------- 300,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 150 batches...
Case Study Gamma Company manufactures soft drinks. Its manufacturing plant has the capacity to produce 10,000...
Case Study Gamma Company manufactures soft drinks. Its manufacturing plant has the capacity to produce 10,000 cases each month; current production and sales are 7,500 cases per month. The company normally charges $150 per case. Cost information for the current activity level is as follows: Variable costs that vary with units produced Direct materials ---------------------------------------------$ 262,500 Direct manufacturing labour -------------------------------- 300,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 150 batches...
1. ABC Company has produced a higher level of production in May than it produced in...
1. ABC Company has produced a higher level of production in May than it produced in April, but had the same variable costs per unit and the same total fixed costs. Which of the following is true about May’s reported costs? A. Total variable cost is less in May B. Total cost per unit is less in May C. Total cost per unit is more in May D. Total fixed costs are more in May 2. Depreciation on sewing machines...
Case Study 4 Husain Trading Company is dealing in different kinds of buying and selling of...
Case Study 4 Husain Trading Company is dealing in different kinds of buying and selling of goods to vast range of customers in Muscat region and provided the following data to understand the cash position every month start from January to July. The sales book reported the sales amount for seven months as below: - January February March April May June July 555,000 475,000 485,000 505,000 598,000 526,000 565,000 The sales reported every month including cash sales and credit sales....
XX company budgeted 10,000 units for production during 2019. It has capacity to produce 12,000 units....
XX company budgeted 10,000 units for production during 2019. It has capacity to produce 12,000 units. Fixed factory overhead is allocated to production. The following estimated costs were provided for 10,000 units: Direct material $ 70,000 Direct labor 300,000 Variable manufacturing overhead 40,000 Fixed factory overhead costs 50,000 Total $ 460,000 All fixed costs are unavoidable. XX received an offer from another company to manufacture the 10,000 units for $39, for the same quality. In this case, when XX compares...
Task 3: Analysis of Case Study on Regulating Information Security for the Company: TransManuCo has asked...
Task 3: Analysis of Case Study on Regulating Information Security for the Company: TransManuCo has asked for your help in dealing with securing their information while they remain within set regulations. In order to do business efficiently and effectively the company uses eSign. However, they have concerns about the security of this especially with clients overseas. According to the new Protecting Cyber Networks Act Sec. 103 “Permits private entities to monitor or operate defensive measures to prevent or mitigate cybersecurity...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT