QUESTION 1 The following is the budget of a manufacturing enterprise that produces only one type of product: Total Budgeted production Budgeted direct material cost Budgeted direct labour cost Budgeted manufacturing overheads Budgeted direct labour hours Budgeted machine hours 1 000 units N$15 000 N$20 000 N$12 000 4 000 hours 3 000 hours Additional information Actual cost product unit of table: Material 2 m @ N$50 per m Labour: 3 hours @ N$40 per hour It normally takes 1.5 machine hours to produce one product. REQUIRED: Calculate the predetermined overhead rate (POR) and unit product cost according to six different bases.
QUESTION 1 The following is the budget of a manufacturing enterprise that produces only one type of product: Total Budgeted production Budgeted direct material cost Budgeted direct labour cost Budgeted manufacturing overheads Budgeted direct labour hours Budgeted machine hours 1 000 units N$15 000 N$20 000 N$12 000 4 000 hours 3 000 hours Additional information Actual cost product unit of table: Material 2 m @ N$50 per m Labour: 3 hours @ N$40 per hour It normally takes 1.5 machine hours to produce one product. REQUIRED: Calculate the predetermined overhead rate (POR) and unit product cost according to six different bases.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:QUESTION 1
The following is the budget of a manufacturing enterprise that produces only one type of product:
Total
Budgeted production
Budgeted direct material cost
Budgeted direct labour cost
Budgeted manufacturing overheads
Budgeted direct labour hours
Budgeted machine hours
1 000 units
N$15 000
N$20 000
N$12 000
4 000 hours
3 000 hours
Additional information
Actual cost product unit of table:
Material
2 m @ N$50 per m
Labour:
3 hours @ N$40 per hour
It normally takes 1.5 machine hours to produce one product.
REQUIRED:
Calculate the predetermined overhead rate (POR) and unit product cost according to six different
bases.
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VIEWStep 2: Direct material rate method
VIEWStep 3: Direct labor rate method
VIEWStep 4: Pre-determined overhead rate under prime cost method
VIEWStep 5: Direct labor hour rate method
VIEWStep 6: Machine hour rate method
VIEWStep 7: Per unit rate method
VIEWStep 8: Cost of production per unit
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