EcoHouses, Ltd. buys straw bales from farmers at 2 each, which it then treats with...

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EcoHouses, Ltd. buys straw bales from farmers at 2 € each, which it then treats with fungicide, before selling the bales for 4 € each as a building material for "eco-friendly" housing. The company is about to prepare its budget for the next year, using the following figures: Sales 1,500,000 treated bales 0.75 € per bale. Variable treatment costs (Bales are treated as soon as they are received) 100,000 treated bales 200,000 treated bales Expected opening stock Budgeted closing stock Direct labour costs Budgeted fixed costs 0.50 € per treated bales 800,000 € Considering that the company uses variable costing: 1. Calculate the production quantities and its production cost budget. 2. Prepare the budgeted income statement for the next year. EcoHouses, Ltd. buys straw bales from farmers at 2 € each, which it then treats with fungicide, before selling the bales for 4 € each as a building material for "eco-friendly" housing. The company is about to prepare its budget for the next year, using the following figures: Sales 1,500,000 treated bales 0.75 € per bale. Variable treatment costs (Bales are treated as soon as they are received) 100,000 treated bales 200,000 treated bales Expected opening stock Budgeted closing stock Direct labour costs Budgeted fixed costs 0.50 € per treated bales 800,000 € Considering that the company uses variable costing: 1. Calculate the production quantities and its production cost budget. 2. Prepare the budgeted income statement for the next year.

Answer rating: 100% (QA)

1 Production Quantities and Production Cost Budget Opening Stock 100000 treated bales Add Bu... View the full answer