XYZ Ltd which manufactures and sells one product is preparing its budget for the three months,...

 

 

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XYZ Ltd which manufactures and sells one product is preparing its budget for the three months, July, August and September 2007. Forecast sales are as follows: July August September October November Units 18,000 22,000 24,000 20,000 21,000 The company aims: to carry finished goods stock equal to 50% of the following month's sales at the end of each month. to maintain raw material stocks at the end of each month equal to 20% of next month's production requirements. - Stocks on 30 June are expected to be: Finished goods Material A001 Material B001 9000 units 8,000 kg 12,000 kg Standard product details, forecast prices and fixed overheads for the next 3 months are:- Material A0001 Rs.4 per kg Material B0001 Rs.6 per kg Direct labor 1.5 hours at Rs.4 per kg Variable production overheads Rs.2 per labor hour Variable selling overheads 2.5% of sales value. Forecast selling price Fixed overheads: Production Selling and distribution Administration Required: Rs.50 per unit Rs.324,000 Rs.125,000 Rs.105,000 (a) Prepare the following budgets for each month and in total for 3 months Production in units Purchases for Material B 001 in kg and Rs. (b) Prepare a hudgeted Profit and loss Account in marginal costing format for the 3 month period ending 30 September (c) Suggest 2 reasons for preparing a Purchasing budget XYZ Ltd which manufactures and sells one product is preparing its budget for the three months, July, August and September 2007. Forecast sales are as follows: July August September October November Units 18,000 22,000 24,000 20,000 21,000 The company aims: to carry finished goods stock equal to 50% of the following month's sales at the end of each month. to maintain raw material stocks at the end of each month equal to 20% of next month's production requirements. - Stocks on 30 June are expected to be: Finished goods Material A001 Material B001 9000 units 8,000 kg 12,000 kg Standard product details, forecast prices and fixed overheads for the next 3 months are:- Material A0001 Rs.4 per kg Material B0001 Rs.6 per kg Direct labor 1.5 hours at Rs.4 per kg Variable production overheads Rs.2 per labor hour Variable selling overheads 2.5% of sales value. Forecast selling price Fixed overheads: Production Selling and distribution Administration Required: Rs.50 per unit Rs.324,000 Rs.125,000 Rs.105,000 (a) Prepare the following budgets for each month and in total for 3 months Production in units Purchases for Material B 001 in kg and Rs. (b) Prepare a hudgeted Profit and loss Account in marginal costing format for the 3 month period ending 30 September (c) Suggest 2 reasons for preparing a Purchasing budget

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XYZ Ltd Answer a Production Budget July August September Jul to Sep October November Note Budgeted units sold 1800000 2200000 2400000 6400000 2000000 ... View the full answer