Bokgoni Corporation has the following budgeted sales for the selected four-month period: Month Unit Sales July 20,000 August 35,000 September 25,000 October 30,000 Sales price per unit is R180 Plans are to have an inventory of finished product equal to 20% of the unit sales for the next month. There was 4,000 units in beginning inventory on July 1st. Three Kilogram of materials are required for each unit produced. Each Kilogram of material costs R20. Inventory levels for materials equal 30% of the needs for the next month. Desired ending inventory for September is 25,200 Kilogram of material. Beginning inventory for July was 20,700 Kilogram of material. Each unit requires 0.6 hours of direct labor and the average wage rate is $16 per hour. Variable overhead rate is R3.50 per direct labor hour. There is also fixed overhead of R22,000 per month. The company pays a 3% commission on sales. Company has fixed selling and administrative expenses as follows: Rent R6,000/month Utilities R1,200/month Advertising R400/month Office Salaries R35,000/month Required: A. Prepare a sales budget for July, August, and September and in total for the quarter. B. Prepare production budgets for July, August, and September and in total for the quarter. C. Prepare a direct materials purchases budget in Rand Amounts for July, August, and September and in total for the quarter. D. Prepare a direct labor budget in hours and total cost for July, August and September and in total for the quarter.
Bokgoni Corporation has the following budgeted sales for the selected four-month period:
Month Unit Sales
July 20,000
August 35,000
September 25,000
October 30,000
Sales price per unit is R180
Plans are to have an inventory of finished product equal to 20% of the unit sales for the next month. There was 4,000 units in beginning inventory on July 1st.
Three Kilogram of materials are required for each unit produced. Each Kilogram of material costs R20. Inventory levels for materials equal 30% of the needs for the next month.
Desired ending inventory for September is 25,200 Kilogram of material. Beginning inventory for July was 20,700 Kilogram of material.
Each unit requires 0.6 hours of direct labor and the average wage rate is $16 per hour.
Variable
The company pays a 3% commission on sales.
Company has fixed selling and administrative expenses as follows:
Rent R6,000/month
Utilities R1,200/month
Advertising R400/month
Office Salaries R35,000/month
Required:
A. Prepare a sales budget for July, August, and September and in total for the quarter.
B. Prepare production budgets for July, August, and September and in total for the quarter.
C. Prepare a direct materials purchases budget in Rand Amounts for July, August, and September and in total for the quarter.
D. Prepare a direct labor budget in hours and total cost for July, August and September and in total for the quarter.
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