Lily Tide Ltd makes one product, which sells for $160 each in January and February and $
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Question:
Lily Tide Ltd makes one product, which sells for $160 each in January and February and $ 180 in March, and prepares functional budgets on a monthly basis. For the first three months of 2020, the following figures are proposed:
Sales
January | 10,000 units |
February | 11,000 units |
March | 10,000 units |
A closing stock of 10% of the next month's sales is required, the forecast sales for April is
12,000 units.
The standard material cost of one unit of finished product is:
Material X | 5 units at $3 per unit |
Material Y | 2 units at $8 per unit |
Material Z | 1 unit at $6 per unit |
The standard direct labour cost of one unit of finished product is:
Department A | 2 hours at $5 per hour |
Department B | 2 hours at $6 per hour |
Department C | 3 hours at $4 per hour |
Material
Material | X | Y | Z |
Opening Stock | 16,000 | 15,600 | 18,000 |
Closing Stock | 12,000 | 11,600 | 21,600 |
Required:
- Calculate the standard prime cost of one unit of finished product.(6 marks)
- Calculate the Sales Budget for each of months.(3 marks)
- Calculate the Production Budget for each of months.(6 marks)
- Calculate the Materials usage Budget for each material for each of months and in total. (6 marks)
- Calculate the Material Purchase Budget for each material.(6marks)
- Calculate the Labour Hour Budget(3 marks)
- Calculate labour cost Budget(6 marks)
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