Stackit Ltd. manufactures three sizes of wooden bookcases. The information relating to the production of the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Stackit Ltd. manufactures three sizes of wooden bookcases. The information relating to the production of the three bookcases for next year is as follows: Selling Price Cost of wood Direct labour Anticipated sales volume (units) Small Opening inventories of Finished goods (units) 90 Medium Deluxe 2000 180 14 15 (1 hours) 45 (3 hours) 90 (6 hours) 16 22 33 50 28 Other variable costs Product related fixed costs 10,000 15,000 25,000 250 1000 100 60 3000 80 Other Fixed Costs which are not product related for the year are 250,000 Labour costs per hour are 15. No inventories (stocks) of wood (raw material) are kept as a local supplier delivers it within a few hours. Closing finished goods inventories (stock) is estimated to be 10% higher than the opening. There is currently a shortage of labour to produce the bookcases next year. Labour hours are limited to 22,500 hours for next year. A foreign supplier is willing to supply the small bookcases if Stackit cannot meet demand; the subcontract cost of buying in the small bookcase is 75. Required i) Prepare the following: a) Sales budget in units and value for individual products and the business as a whole. (2 marks) b) The quantity of bookcases that are needed to satisfy sales demand and reflect the change in stock levels. c) Direct labour hours budget in hours and cost. (5 marks) (4 marks) d) The number and cost of small bookcases that need to be purchased from the foreign supplier in order to overcome the shortage of labour. (3 marks) ii) e) Raw material (wood) purchase budget for the in-house produced bookcases. Briefly outline why most organisations prepare financial budgets. (3 marks) (8 marks) Stackit Ltd. manufactures three sizes of wooden bookcases. The information relating to the production of the three bookcases for next year is as follows: Selling Price Cost of wood Direct labour Anticipated sales volume (units) Small Opening inventories of Finished goods (units) 90 Medium Deluxe 2000 180 14 15 (1 hours) 45 (3 hours) 90 (6 hours) 16 22 33 50 28 Other variable costs Product related fixed costs 10,000 15,000 25,000 250 1000 100 60 3000 80 Other Fixed Costs which are not product related for the year are 250,000 Labour costs per hour are 15. No inventories (stocks) of wood (raw material) are kept as a local supplier delivers it within a few hours. Closing finished goods inventories (stock) is estimated to be 10% higher than the opening. There is currently a shortage of labour to produce the bookcases next year. Labour hours are limited to 22,500 hours for next year. A foreign supplier is willing to supply the small bookcases if Stackit cannot meet demand; the subcontract cost of buying in the small bookcase is 75. Required i) Prepare the following: a) Sales budget in units and value for individual products and the business as a whole. (2 marks) b) The quantity of bookcases that are needed to satisfy sales demand and reflect the change in stock levels. c) Direct labour hours budget in hours and cost. (5 marks) (4 marks) d) The number and cost of small bookcases that need to be purchased from the foreign supplier in order to overcome the shortage of labour. (3 marks) ii) e) Raw material (wood) purchase budget for the in-house produced bookcases. Briefly outline why most organisations prepare financial budgets. (3 marks) (8 marks)
Expert Answer:
Answer rating: 100% (QA)
Stackit Ltd Production Analysis Based on the information provided heres an analysis of Stackit Ltds ... View the full answer
Related Book For
Accounting and Finance An Introduction
ISBN: 978-1292088297
8th edition
Authors: Peter Atrill, Eddie McLaney
Posted Date:
Students also viewed these finance questions
-
Norway has a long tradition of boatbuilding stretching back to before Viking times. This is due, no doubt, to Norways proximity to the sea, ample forests, and long coastline. Among luxury sailing...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Computer Technologies provides maintenance service for computers and office equipment for companies throughout the Northeast. The sales manager is elated because she closed a $300,000 three-year...
-
Is the extent of creative destruction likely to differ across industries? Can the risk of creative destruction be incorporated into a five-forces analysis of an industry?
-
Residential real estate prices depend, in part, on property size and number of bedrooms. The house size X1 (in hundreds of square feet), number of bedrooms X2, and house price Y (in thousands of...
-
Show that the residuals from a linear regression model can be expressed as $\mathbf{e}=(\mathbf{I}-\mathbf{H}) \boldsymbol{\varepsilon}$.
-
Administrative theorists concluded many decades ago that the most effective organizations have a narrow span of control. Yet todays top-performing manufacturing firms have a wide span of control. Why...
-
1. Marketing is often criticized because it "creates a consumer need for items they don't actually need". Support or refute this claim. 2. Based on analysis, could this change based on the industry...
-
Covid-19's s created a powerful burning platform for change in many unanticipated sectors, with many organizations struggling or simply unable to cope with the velocity of change they have...
-
Phone number Classify the variable as qualitative or quantitative.
-
Number of cars owned Classify the variable as qualitative or quantitative.
-
After the hand, the cards are discarded, and the next hand continues with the remaining cards in the deck. The player has had an opportunity to see some of the cards in the previous hand, those that...
-
Height Classify the variable as qualitative or quantitative.
-
Number of students at a university Classify the variable as qualitative or quantitative.
-
At the beginning of the year, managers at King Industries estimated $420,000 in manufacturing overhead, 20,000 direct labor hours and 50,000 machine hours. Actual manufacturing costs at the end of...
-
1. Following are information about Alhadaf Co. Cost incurred Inventory Purchases Sales Adverting expense Salary Expense Depreciation Beginning Inventory Ending Inventory Amount 118,000 350.000 90,000...
-
Lombard Ltd has been offered a contract for which there is available production capacity. The contract is for 20,000 identical items, manufactured by an intricate assembly operation, to be produced...
-
Lewisham Ltd manufactures one product line the Zenith. Plans over the next few months are as follows: 1 Sales demand ...................................Units July .........................180,000...
-
Iqbal Ltd started trading on 1 July 2010. During the first five years of trading, the following occurred: Required: Assume that the company paid the maximum legal dividend each year. Under normal...
-
2019. Peabody Energy Company and Arch Resources, Inc., are two titans in a now-dwindling industry. Peabody operates three mines in the Southern Powder River Basin (SPRB) in Wyoming, one of which is...
-
Beginning around 1915, Natural Products Refining Corporation (NPRC) operated a chemical plant in Jersey City, New Jersey, at which it turned chromite ore into chromium chemicals (primarily sodium...
-
When GTE Sylvania discovered it was losing market share to other television manufacturers, it developed a franchise plan that limited the number of retailers selling its product in each area....
Study smarter with the SolutionInn App