A small manufacturing firm produces one product. The budgeted sales for the month of January 2021...

 

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A small manufacturing firm produces one product. The budgeted sales for the month of January 2021 are for 10,000 units as a selling price of Sh. 2,000 per unit. Other details are as follows; 1. Two components of input are used in the production of one unit of output. Component (Input) X W Number 5 3 2. Stocks at the beginning of the month are budgeted as follows; 4000 units of finished goods at a unit cost of sh. 1,050 per unit. Component X: 16,000 units at a cost of Sh. 20. Component W: 9,600 units at a cost of Sh. 10. 3. Production of each unit requires the following labour hours. Department Production Hours per Unit Finishing 4 Required: 4 4. Factory overhead is absorbed into units cost on the basis of direct labour hours. The budgeted factory overhead for the month is Sh. 1,920,000. Unit cost of each component 20 10 5. The administration, selling and distribution overhead for the month is budgeted at Sh.5,500,000. 6. The company plans a reduction of 50% in quantity of finished stock at the end of the month and an increase of 30% in the quantity of each input component. a) For the month of January 2021 i. Production quantity budget ii. Materials quantity and purchase budget iii. Direct Labor budget b) The budgeted profit and loss account Labour rate per hour 100 140 (3 marks) (4 marks) (3 marks) (5 marks) A small manufacturing firm produces one product. The budgeted sales for the month of January 2021 are for 10,000 units as a selling price of Sh. 2,000 per unit. Other details are as follows; 1. Two components of input are used in the production of one unit of output. Component (Input) X W Number 5 3 2. Stocks at the beginning of the month are budgeted as follows; 4000 units of finished goods at a unit cost of sh. 1,050 per unit. Component X: 16,000 units at a cost of Sh. 20. Component W: 9,600 units at a cost of Sh. 10. 3. Production of each unit requires the following labour hours. Department Production Hours per Unit Finishing 4 Required: 4 4. Factory overhead is absorbed into units cost on the basis of direct labour hours. The budgeted factory overhead for the month is Sh. 1,920,000. Unit cost of each component 20 10 5. The administration, selling and distribution overhead for the month is budgeted at Sh.5,500,000. 6. The company plans a reduction of 50% in quantity of finished stock at the end of the month and an increase of 30% in the quantity of each input component. a) For the month of January 2021 i. Production quantity budget ii. Materials quantity and purchase budget iii. Direct Labor budget b) The budgeted profit and loss account Labour rate per hour 100 140 (3 marks) (4 marks) (3 marks) (5 marks)

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a i Production Quantity Budget The budgeted production quantity for the month of January 2021 would ... View the full answer