Twilite Ltd is preparing its budget for the next 3 months - June, July and August....

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Twilite Ltd is preparing its budget for the next 3 months - June, July and August. Budgeted sales are as follows: 14,000 units 14,500 units 15,000 units 14,300 units June July August September October14,100 units 1. The selling price of each unit is £300.00 2. It is the company's policy to maintain inventory of finished goods equal to 15% of the following month's budgeted sales in units. Inventory of finished goods at the end of May was 2,100 units. 3. Each unit of product requires 9 Kg of materials at a cost of £17.00 per Kg. It is the company's policy to maintain inventories of materials equal to 10% of the next month's production requirements. Material inventories at the beginning of June were 12,667 Kg. 4. Each unit produced requires 1 hour of direct labour; the direct labour rate is £11.50 per hour. 5. Variable manufacturing overhead is £12 per unit produced and fixed manufacturing overhead is £80,000 per month. The fixed manufacturing overhead figure includes £25,000 depreciation. 6. Variable selling and administrative expenses are £9.00 per unit sold and fixed selling and administrative expenses are £60,000 per month. The fixed selling and administrative expenses include £9,500 of depreciation. Prepare the following budgets for the months of June, July and August: (i) Sales budget (ii) Production budget 2 marks (iii) Direct materials purchases budget 3 marks (iv) Direct labour budget 2 marks (v) Production overhead budget 2 marks (vi) Selling and admin overhead budget 2 marks (vii) Discuss the validity of the criticisms of traditional budgeting that have been advanced by the Beyond Budgeting Round Table. Twilite Ltd is preparing its budget for the next 3 months - June, July and August. Budgeted sales are as follows: 14,000 units 14,500 units 15,000 units 14,300 units June July August September October14,100 units 1. The selling price of each unit is £300.00 2. It is the company's policy to maintain inventory of finished goods equal to 15% of the following month's budgeted sales in units. Inventory of finished goods at the end of May was 2,100 units. 3. Each unit of product requires 9 Kg of materials at a cost of £17.00 per Kg. It is the company's policy to maintain inventories of materials equal to 10% of the next month's production requirements. Material inventories at the beginning of June were 12,667 Kg. 4. Each unit produced requires 1 hour of direct labour; the direct labour rate is £11.50 per hour. 5. Variable manufacturing overhead is £12 per unit produced and fixed manufacturing overhead is £80,000 per month. The fixed manufacturing overhead figure includes £25,000 depreciation. 6. Variable selling and administrative expenses are £9.00 per unit sold and fixed selling and administrative expenses are £60,000 per month. The fixed selling and administrative expenses include £9,500 of depreciation. Prepare the following budgets for the months of June, July and August: (i) Sales budget (ii) Production budget 2 marks (iii) Direct materials purchases budget 3 marks (iv) Direct labour budget 2 marks (v) Production overhead budget 2 marks (vi) Selling and admin overhead budget 2 marks (vii) Discuss the validity of the criticisms of traditional budgeting that have been advanced by the Beyond Budgeting Round Table.

Answer rating: 100% (QA)

Sales Budget June July August Sales in units 14000 14500 15000 Selling price per unit 300 300 3000 S... View the full answer