The standard costs for a manufacturing business are £12 per unit for direct materials, £8 per unit for direct labour and £5 per unit for manufacturing overhead. The sales projection is for 5,000 units, 3,500 units need to be in stock at the end of the period and 1,500 units are in stock at the beginning of the period. The production budget will show costs for that period of:
Answer to relevant QuestionsThe following balances are shown in alphabetical order in a professional service firm’s ledger at the end of a financial year: Advertising ............ 15,000 Bank ................ 5,000 Capital ............... ...Regal Farms Ltd has sales of £2.5 million, a gross profit of £1.7 million and expenses of £800,000. Regal has paid interest of £72,000 and has to provide for Corporations Tax of £310,000 and dividends of £300,000. ...Debtors increase by £15,000 and creditors increase by £11,000. The effect on cash flow of the change in working capital is an: c) decrease of £4,000 Given an original budget of 2,000 units at a variable cost of £3 per unit and actual performance of 1,800 units at an actual cost of £3.20 per unit, the variance based on a flexible budget will be: a) £360 unfavourable Calculate the product’s profitability each year and over the lifecycle and draw appropriate conclusions.
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