Question B2 (a) Dolls house Ltd produces one single product a Childs dolls house. The following...

 

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Question B2 (a) Dolls house Ltd produces one single product a Childs dolls house. The following forecast information is relevant for the year ending 31 December 2022. VI 2021 (b) Standard cost card per house Direct materials: A at £2 per kg B at £5 per kg Cat E6 per kg Direct labour: Unskilled at E6 per hour Skilled at E12 per hour Budgeted sales for year are 2,400 units. Dolls house Ltd budgeted Inventory balances Finished goods: Opening Closing Opening Closing (1) (ii) units 300 500 Material A kg 20,000 17,000 26 kg 5 kg 12 kg 5 hours 6 hours Material B kg 5,000 13,000 Ⓒ2021 Northern Consortium Ltd. Material C kg 4,500 6,750 Page 7 of 8 IDBMA001 Management Accounting Prepare the total production budget (in units) for Dolls house Ltd. Prepare the total material usage budget (in kgs and £) for Dolls house Ltd. (iii) Prepare the total direct labour budget for Dolls house Ltd (both skilled and unskilled labour). Discuss the consequences of budget bias (budgetary slack) for cost control. [3] [9] [4] [4] Question B2 (a) Dolls house Ltd produces one single product a Childs dolls house. The following forecast information is relevant for the year ending 31 December 2022. VI 2021 (b) Standard cost card per house Direct materials: A at £2 per kg B at £5 per kg Cat E6 per kg Direct labour: Unskilled at E6 per hour Skilled at E12 per hour Budgeted sales for year are 2,400 units. Dolls house Ltd budgeted Inventory balances Finished goods: Opening Closing Opening Closing (1) (ii) units 300 500 Material A kg 20,000 17,000 26 kg 5 kg 12 kg 5 hours 6 hours Material B kg 5,000 13,000 Ⓒ2021 Northern Consortium Ltd. Material C kg 4,500 6,750 Page 7 of 8 IDBMA001 Management Accounting Prepare the total production budget (in units) for Dolls house Ltd. Prepare the total material usage budget (in kgs and £) for Dolls house Ltd. (iii) Prepare the total direct labour budget for Dolls house Ltd (both skilled and unskilled labour). Discuss the consequences of budget bias (budgetary slack) for cost control. [3] [9] [4] [4]