K Ltd. produces and markets a very popular product called 'X'. The company is interested in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
K Ltd. produces and markets a very popular product called 'X'. The company is interested in presenting its budget for the second quarter of 2023. The following information are made available for this purpose: (a) It expects to sell 1,50,000 bags of 'X' during the second quarter of 2023 at the selling price of 1,200 per bag. (b) Each bag of 'X' requires 2.5 mtr. of raw material 'Y' and 7.5 mtr. of raw material 'Z'. (c) Stock levels are planned as follows: 1. Particulars Finished Bags of 'X' (Nos.) Raw Material 'Y' (mtr) Raw Material 'Z' (mtr) Empty Bag (Nos.) (d) 'Y' cost 160 per mtr., 'Z' costs 30 per mtr. and 'Empty Bag' costs *110 each. (e) It requires 9 minutes of direct labour to produce and fill one bag of 'X'. Labour cost is 70 per hour. Variable manufacturing costs are 60 per bag. Fixed manufacturing costs 40,00,000 per quarter. (g) Variable selling and administration expenses are 5% of sales and fixed administration and selling expenses are 3,75,000 per quarter. Required Prepare a production budget for the said quarter in quantity. 2. Beginning of Quarter 45,000 96,000 1,71,000 1,11,000 3. End of Quarter 33,000 78,000 1,41,000 84,000 Prepare a raw material purchase budget for 'Y', 'Z' and 'Empty Bags' for the said quarter in quantity as well as in rupees. Compute the budgeted variable cost to produce one bag of 'X'. Mr. X has +2,00,000 investments in his business firm. He wants a 15 percent return on his money. From an analysis of recent cost figures, he finds that his variable cost of operating is 60 percent of sales, his fixed costs are t80,000 per year. Show computations to answer the following questions: (i) What sales volume must be obtained to break even? (ii) What sales volume must be obtained to get 15 percent return on investment? (ii) Mr.X estimates that even if he closed the doors of his business, he would incur t25,000 as expenses per year. At what sales would he be better off by locking his business up? K Ltd. produces and markets a very popular product called 'X'. The company is interested in presenting its budget for the second quarter of 2023. The following information are made available for this purpose: (a) It expects to sell 1,50,000 bags of 'X' during the second quarter of 2023 at the selling price of 1,200 per bag. (b) Each bag of 'X' requires 2.5 mtr. of raw material 'Y' and 7.5 mtr. of raw material 'Z'. (c) Stock levels are planned as follows: 1. Particulars Finished Bags of 'X' (Nos.) Raw Material 'Y' (mtr) Raw Material 'Z' (mtr) Empty Bag (Nos.) (d) 'Y' cost 160 per mtr., 'Z' costs 30 per mtr. and 'Empty Bag' costs *110 each. (e) It requires 9 minutes of direct labour to produce and fill one bag of 'X'. Labour cost is 70 per hour. Variable manufacturing costs are 60 per bag. Fixed manufacturing costs 40,00,000 per quarter. (g) Variable selling and administration expenses are 5% of sales and fixed administration and selling expenses are 3,75,000 per quarter. Required Prepare a production budget for the said quarter in quantity. 2. Beginning of Quarter 45,000 96,000 1,71,000 1,11,000 3. End of Quarter 33,000 78,000 1,41,000 84,000 Prepare a raw material purchase budget for 'Y', 'Z' and 'Empty Bags' for the said quarter in quantity as well as in rupees. Compute the budgeted variable cost to produce one bag of 'X'. Mr. X has +2,00,000 investments in his business firm. He wants a 15 percent return on his money. From an analysis of recent cost figures, he finds that his variable cost of operating is 60 percent of sales, his fixed costs are t80,000 per year. Show computations to answer the following questions: (i) What sales volume must be obtained to break even? (ii) What sales volume must be obtained to get 15 percent return on investment? (ii) Mr.X estimates that even if he closed the doors of his business, he would incur t25,000 as expenses per year. At what sales would he be better off by locking his business up?
Expert Answer:
Answer rating: 100% (QA)
A 1Production Budget Total bags needed Expected sales Desired ending inventory Total bags needed 150000 12000 138000 bags 2 Raw Material Purchase Budg... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these accounting questions
-
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...
-
LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 2015, and is planning for...
-
Part C - Experimental results: Banding pattern predictions after the second round of replication Can you identify the banding patterns predicted by each model after the second round of replication?...
-
Coffin Corporation appropriately uses the installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2014 and 2015....
-
The following compound is an intermediate in the pentose phosphate pathway, an alternative route for glucose metabolism. Identify the sugar it is derivedfrom.
-
A company in the process industry produces a chemical compound that is sold to manufacturers for use in the production of certain plastic products. The plant that produces the compound employs...
-
Determine the direction of the magnetic force exerted at the center of the wire or on the particles in Figure 28. 20. Data from Figure 28. 20 Figure 28.20 (a) (b) N S S N +8 te
-
Western Bank & Trust purchased land and a building for the lump sum of $3,000,000. To get the maximum tax deduction, Western allocated 90% of the purchase price to the building and only 10% to the...
-
Sketch a hand written a Enhanced ER diagram for this table and fix the error if there is Message cation D Notification UserNotif Password UserName UserID RoleID User D Phone User # Role securityID...
-
(a) A disk of mass M and radius R is held up by a massless string, as shown in Fig. The surface of the disk is frictionless. What is the tension in the string? What is the normal force per unit...
-
Your managing director asks if you can participate in a seminar that the firm is doing on Tax Efficient Financial Planning. He would like you to send him the various methods clients often use to...
-
Discuss the factors that a consumer service organization should take into account when deciding on the level of service quality to provide. Would the factors be different in a business-to-business...
-
Probable cause must be based upon? a. Beyond reasonable doubt b. Suppositions c. On informants beliefs d. Some factual information
-
Why does a business marketer need to have a network view?
-
What are the benefits of segmentation? What are the drawbacks?
-
What are the qualifications to become a certified fraud examiner?
-
AGE | MINDTAP rcises gnment: Unit 2 Exercises 3- sations 7. ma2cp08h.Ch02.25 x=7;y=2*x-3; z=x+y-3; x=z/y; y-z-x; w=x+y+2*z; W-; y=2*w+z-x; Suppose x, y, z, and w are int variables. What value is...
-
In each of the following independent cases, document the system using whatever technique(s) your instructor specifies. a. Dreambox Creations (www.dreamboxcreations.com/) in Diamond Bar, California,...
-
Abercrombie & Fitch sells casual apparel and personal care products for men, women, and children through retail stores located primarily in shopping malls. Its fiscal year ends January 31 of each...
-
Firms such as Deere & Company and Macys, Inc., often sell their receivables as a means of obtaining financing. Should firms selling receivables remove the receivables from the balance sheet, or...
-
Recent years have witnessed some of the most significant accounting scandals in history. For each scandal listed in Exhibit 6.17, identify how balance sheet quality and earnings quality were...
-
For potential lenders, investigating borrowers trustworthiness is costly. This problem, known as asymmetric information, occurs both before and after a transaction. a. Before a transaction, the least...
-
Describe a commercial banks assets and liabilities.
-
Financial intermediaries can manage the problems of adverse selection and moral hazard. a. They can reduce adverse selection by collecting information on borrowers and screening them to check their...
Study smarter with the SolutionInn App