i)  Produce a budget statement for Caltex for November ii)  Produce a profit statement for Caltex for November 3. iii) Produce a flexed budget statement for Caltex for Novembe

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Caltex Products plc manufactures electric mini-lawnmowers. Its sales and costs’ budget for November 20X2 is as follows:

Sales: 3 000 units × £72/unit

Costs:
Direct materials (metal): 3 000 units × (1kg per unit × £14/kg)

Direct materials (plastic): 3 000 units × (0.5kg per unit × £7/kg)

Direct labour: 3 000 units × (0.75 hours per unit × £8/hr)

Production overhead: £86 500

Other overheads: £31 00

  • The company does not absorb production overheads using an overhead absorption rate.
  • It may be assumed that all of its overheads are fixed in nature.
    The company’s actual results for the same month (November) are as follows: Sales: 2 950 units × £73/unit

 

Costs:

Direct materials (metal): 2 950 units × (0.9kg per unit × £13.80/kg)

Direct materials (plastic): 2 950 units × (£0.5kg per unit × £7.20/unit)

Direct labour: 2 950 units × (0.7 hrs per unit × £8.20/hr)

Production overhead: £84 250

Other overheads: £32 250

Net profit: £34 658

  1. i)  Produce a budget statement for Caltex for November

  2. ii)  Produce a profit statement for Caltex for November

3. iii) Produce a flexed budget statement for Caltex for November

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