Q2 The following information relating to third and last quarter of 2018-19 is furnished by a company which manufactures and sells a single product: Third Quarter (Actual) Last Quarter (Estimate) Sales 6,24,000 १6,60,000 Inventory of raw material and finished goods Closing Balance Target Closing Balance Raw Material A (kgs) 23,500 25,000 Raw MaterialB (kgs) 13,400 15,000 Finished Goods (units) 700 1,000 Unit Cost data: Raw Material A- 10 kgs@ 6 Raw Material B- 5 kgs @ 4 Direct Labour: Machine Shop-> Machine time: 5 hours @ 7 8 Assembly-> Labour time: 2 hours @ 10 Production Overheads: Machine Shop-> 24 per machine hour Assembly-> ? 20 per labour hour Selling and Administration overheads- 20% of production cost Profit Margin- 10% of selling price Production and sales occur evenly during the budget period. Required: (1) to calculate the selling price of the product and the number of units estimated to be sold (i) to prepare for the last quarter of the year: (a) Production Budget in units (b) Material Purchase Budget (Quantity and Value) (c) Production Cost Budget

Q2 The following information relating to third and last quarter of 2018-19 is furnished by a company which manufactures and sells a single product: Third Quarter (Actual) Last Quarter (Estimate) Sales 6,24,000 १6,60,000 Inventory of raw material and finished goods Closing Balance Target Closing Balance Raw Material A (kgs) 23,500 25,000 Raw MaterialB (kgs) 13,400 15,000 Finished Goods (units) 700 1,000 Unit Cost data: Raw Material A- 10 kgs@ 6 Raw Material B- 5 kgs @ 4 Direct Labour: Machine Shop-> Machine time: 5 hours @ 7 8 Assembly-> Labour time: 2 hours @ 10 Production Overheads: Machine Shop-> 24 per machine hour Assembly-> ? 20 per labour hour Selling and Administration overheads- 20% of production cost Profit Margin- 10% of selling price Production and sales occur evenly during the budget period. Required: (1) to calculate the selling price of the product and the number of units estimated to be sold (i) to prepare for the last quarter of the year: (a) Production Budget in units (b) Material Purchase Budget (Quantity and Value) (c) Production Cost Budget

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Q2 The following information relating to third and last quarter of 2018-19 is furnished
by a company which manufactures and sells a single product:
Third Quarter (Actual)
Last Quarter (Estimate)
Sales
6,24,000
6,60,000
Inventory of raw material
and finished goods
Closing Balance
Target Closing Balance
Raw Material A (kgs)
23,500
25,000
Raw Material B (kgs)
13,400
15,000
Finished Goods (units)
700
1,000
Unit Cost data:
Raw Material A-
→10 kgs@ ? 6
5 kgs @ ? 4
Raw Material B-
Direct Labour:
Machine Shop-> Machine time: 5 hours @ 7 8
Assembly-> Labour time: 2 hours @ ? 10
Production Overheads:
Machine Shop-> ? 24 per machine hour
Assembly-> ? 20 per labour hour
Selling and Administration overheads- 20% of production cost
Profit Margin- 10% of selling price
Production and sales occur evenly during the budget period.
Required:
(1) to calculate the selling price of the product and the number of units estimated to
be sold
(i) to prepare for the last quarter of the year:
(a) Production Budget in units
(b) Material Purchase Budget (Quantity and Value)
(c) Production Cost Budget

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