Tutorial Questions Budgeting (Part 1), Lecture notes of Management Accounting

Download Tutorial Questions Budgeting (Part 1) and more Lecture notes Management Accounting in PDF only on Docsity!

about:blank Tutorial Questions Budgeting (Part 1) (13) Tutorial Questions BS4112 & BS3969 ‘Budgeting 1 ‘Tutorial Questions Question 1 — Revisit the lecture example Perfect Printers, and attempt this question on your own. Question 2 Candyco Ltd Complete this ahead of class Candyco Ltd is currently expanding its product range and you have been asked to complete the first draft of the annual budget for the company’s new line of fudge — “Fab Fudge’. Total forecast sales for this product is 8,000 units (batches) with budgeted revenue of £496,000. Selling costs are estimated to be £19,360. Standard cost information, given below, is always calculated per batch (i.e. one batch = one unit). The company is in production 52 weeks of the year and for forecasting purposes sales and production are assumed to occur evenly throughout the period. Manufacturing overheads, which are estimated at £16,000 for the year, are absorbed based on direct labour hours. Labour cost is £8.35 per hour. EOQ is used for stock ‘management and target closing stock of raw materials (except for fresh cream) is forecast to be the economic re-order level. Closing stock of finished goods should be equivalent to 1.5 weeks of sales volume. Forecast sales demand (no of batches) | 8,000 Material usage per batch Cane Sugar 3.5 kg @ £2.75 per kg Fresh Cream 3 litres @ £3.20 per litre ‘Com Syrup litre @ £1.80 per litre Labour hours per batch (0.75 @ £8.35 per hour Opening stock — finished goods (no of batches) 220 Opening stock — total finished goods cost £6,600 ‘Raw material information Opening stock | Opening stock £ Target Closing Stock Cane Sugar 275 kg. £730 GATkg Fresh Cream = = = Com Syrup 300 litres £525 216 litres Required Prepare the following: T [Revenue budget [6 Manufacturing overhead budget 2 | Production budget (units) Glosing stock budget 3._| Direct materials usage budget Cést of sales budget 4 | Direct materials purchasing budget Buldgeted profit and loss account 3__[ Direct labour budget 1/2