MC Packaging Limited (“MC") makes aluminum cans for the food processing industry. It produces the cans in three different sizes according to capacity: small, medium and large. The following details are taken from next quarter's budget: Large 4,000 Medium 5,000 Small Sales quantity 3,500 Direct labour: 0.90 0.80 Fitters and tumers (hours/unit) Assemblers and packers (hours/unit) 1.25 0.40 0.25 0.20 Direct materials Aluminum strips per unit Packaging materials (metres) 2.50 1.25 1.00 0.50 0.50 0.75 Finished stocks (units) Opening Closing 300 400 200 400 300 150 Rates of pay for fitters/turners and assemblers/packers are $10.00 per hour and S6.00 per hour respectively. Aluminum strips cost $3.00 each and packaging is $1.00 per metre. MC plans to have opening material stocks of 220 aluminum strips and 80 metres of packaging. The closing material stocks are 150 aluminum strips and 50 metres of packaging. The quarter's fixed production overheads of $31,700 are attached to product lines on a direct labour hour basis. Required: a. Prepare the production budget schedule for the quarter. b. Calculate the unit production cost of each type of can. c. Prepare the material usage budget schedule in quantities and value. d. Prepare the materials purchases budget schedule in quantities and value. e. Prepare the direct labour budget schedule in hours and value.
MC Packaging Limited (“MC") makes aluminum cans for the food processing industry. It produces the cans in three different sizes according to capacity: small, medium and large. The following details are taken from next quarter's budget: Large 4,000 Medium 5,000 Small Sales quantity 3,500 Direct labour: 0.90 0.80 Fitters and tumers (hours/unit) Assemblers and packers (hours/unit) 1.25 0.40 0.25 0.20 Direct materials Aluminum strips per unit Packaging materials (metres) 2.50 1.25 1.00 0.50 0.50 0.75 Finished stocks (units) Opening Closing 300 400 200 400 300 150 Rates of pay for fitters/turners and assemblers/packers are $10.00 per hour and S6.00 per hour respectively. Aluminum strips cost $3.00 each and packaging is $1.00 per metre. MC plans to have opening material stocks of 220 aluminum strips and 80 metres of packaging. The closing material stocks are 150 aluminum strips and 50 metres of packaging. The quarter's fixed production overheads of $31,700 are attached to product lines on a direct labour hour basis. Required: a. Prepare the production budget schedule for the quarter. b. Calculate the unit production cost of each type of can. c. Prepare the material usage budget schedule in quantities and value. d. Prepare the materials purchases budget schedule in quantities and value. e. Prepare the direct labour budget schedule in hours and value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:MC Packaging Limited (“MC") makes aluminum cans for the food processing industry. It
produces the cans in three different sizes according to capacity: small, medium and large. The
following details are taken from next quarter's budget:
Large
4,000
Medium
5,000
Small
Sales quantity
3,500
Direct labour:
1.25
0.90
0.80
Fitters and tumers (hours/unit)
Assemblers and packers (hours/unit)
0.40
0.25
0.20
Direct materials
2.50
Aluminum strips per unit
Packaging materials (metres)
1.00
0.75
0.50
0.50
1.25
Finished stocks (units)
Opening
Closing
300
400
200
400
300
150
Rates of pay for fitters/turners and assemblers/packers are $10.00 per hour and S6.00 per hour
respectively. Aluminum strips cost $3.00 each and packaging is $1.00 per metre. MC plans to
have opening material stocks of 220 aluminum strips and 80 metres of packaging. The closing
material stocks are 150 aluminum strips and 50 metres of packaging. The quarter's fixed
production overheads of $31,700 are attached to product lines on a direct labour hour basis.
Required:
a. Prepare the production budget schedule for the quarter.
b. Calculate the unit production cost of each type of can.
c. Prepare the material usage budget schedule in quantities and value.
d. Prepare the materials purchases budget schedule in quantities and value.
e. Prepare the direct labour budget schedule in hours and value.
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