DPK Co is a company established over 5 years ago in Salthill, Co. Galway. It was...

 

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DPK Co is a company established over 5 years ago in Salthill, Co. Galway. It was formed by two sisters who saw a gap in the market for organic body products such as face and body wash, face cream and shampoos. The sisters were keen to grow the business in a sustainable way therefore the key input to their products was seaweed - available in abundance along the coast and with a close proximity to the business. They sold their products within the Irish, UK and wider European markets. The company employs a management accountant who has been busy preparing budgets for the period from October to December 2023 and is currently compiling pertinent information relating to one of the company's newest products: Sea-mist. Sea-mist is a refreshing facial spray based on two key organic ingredients: mineral water and seaweed extract. There is a simple manufacturing process and the product is manufactured in a 500ml size for everyday use. Details relating to this productare shown below. 1. Projected sales for the last quarter of 2023 (unit = 500ml bottle size) Month Sales units October 4,300 November 4,800 December 5,000 The projected selling price for the 500ml bottle of Sea-mist is 6.50. 2. The budgeted costs to produce one bottle of Sea-mist is as follows: Materials Mineral water (400ml) 0.32 Seaweed extract (100ml) 0.60 Recycled plastic bottle 0.15 Labour (0.2hr @9.50 per hour) 1.90 Variable production overhead 0.45 Total cost 3.42 The company has arranged to purchase top-quality mineral water at a cost of 0.80 per litre and seaweed extract at a cost of 5.00 per litre. These prices have been fixed from 2020 until 2024. 3. At1 October 2023, the company expects to have the following opening inventory: Sea-mist (500ml bottles) | 950 bottles Mineral water 2,500litres Seaweed extract 1,500litres Recycled Plastic bottles 1,200 bottles 4. Estimated closing inventory of finished goodsand raw materials are outlined below: Inventory item End October End November End December Sea-mist (500ml bottles) | |1,200 1,700 2,200 Mineral water (litres) 2,800 3,010 4,120 Seaweed extract (res) 1,800 Recycled Plastic bottles 1,300 1,800 2,000 1,500 800 Requirement (a) Prepare a total sales budget (in units and ) units for the quarter ending 31st December 2023. 2Marks (b) Prepare a total production budget inunits for the quarter ending 31st December 2023. 4 Marks (c) Prepare a total materials purchase budget (in units and ) for each material for the quarter ending 31st December 2023. 15 Marks (d) Prepare a total labour cost budget (in hours and for the quarter ending 31st December 2023. 2 Marks (e) Prepare a total variable overhead cost budget for the quarter ending 31st December 2023. DPK Co is a company established over 5 years ago in Salthill, Co. Galway. It was formed by two sisters who saw a gap in the market for organic body products such as face and body wash, face cream and shampoos. The sisters were keen to grow the business in a sustainable way therefore the key input to their products was seaweed - available in abundance along the coast and with a close proximity to the business. They sold their products within the Irish, UK and wider European markets. The company employs a management accountant who has been busy preparing budgets for the period from October to December 2023 and is currently compiling pertinent information relating to one of the company's newest products: Sea-mist. Sea-mist is a refreshing facial spray based on two key organic ingredients: mineral water and seaweed extract. There is a simple manufacturing process and the product is manufactured in a 500ml size for everyday use. Details relating to this productare shown below. 1. Projected sales for the last quarter of 2023 (unit = 500ml bottle size) Month Sales units October 4,300 November 4,800 December 5,000 The projected selling price for the 500ml bottle of Sea-mist is 6.50. 2. The budgeted costs to produce one bottle of Sea-mist is as follows: Materials Mineral water (400ml) 0.32 Seaweed extract (100ml) 0.60 Recycled plastic bottle 0.15 Labour (0.2hr @9.50 per hour) 1.90 Variable production overhead 0.45 Total cost 3.42 The company has arranged to purchase top-quality mineral water at a cost of 0.80 per litre and seaweed extract at a cost of 5.00 per litre. These prices have been fixed from 2020 until 2024. 3. At1 October 2023, the company expects to have the following opening inventory: Sea-mist (500ml bottles) | 950 bottles Mineral water 2,500litres Seaweed extract 1,500litres Recycled Plastic bottles 1,200 bottles 4. Estimated closing inventory of finished goodsand raw materials are outlined below: Inventory item End October End November End December Sea-mist (500ml bottles) | |1,200 1,700 2,200 Mineral water (litres) 2,800 3,010 4,120 Seaweed extract (res) 1,800 Recycled Plastic bottles 1,300 1,800 2,000 1,500 800 Requirement (a) Prepare a total sales budget (in units and ) units for the quarter ending 31st December 2023. 2Marks (b) Prepare a total production budget inunits for the quarter ending 31st December 2023. 4 Marks (c) Prepare a total materials purchase budget (in units and ) for each material for the quarter ending 31st December 2023. 15 Marks (d) Prepare a total labour cost budget (in hours and for the quarter ending 31st December 2023. 2 Marks (e) Prepare a total variable overhead cost budget for the quarter ending 31st December 2023.