Covax Ltd manufactures one product known as Covaccine. The following information relate to the preparation of the budget for the year ended 31 December 2020: Sales budget for the product Covaccine Expected selling price per unit R150 Expected sales in units 15 000 All sales are on credit. Covaccine requires 6 units of material A. Raw material A cost price is R5 per unit. Direct labour hours per unit is 1 hour at the cost of R8 per hour. Additional information: At 01 January 2020, stocks were as follows: Product Covaccine 800 units Raw material A 4 500 units At 31 December 2020, stocks were as follows: Product Covaccine 880 units Raw material A 4 950 units Prepare the following: 1.Direct labour budget

Covax Ltd manufactures one product known as Covaccine. The following information relate to the preparation of the budget for the year ended 31 December 2020: Sales budget for the product Covaccine Expected selling price per unit R150 Expected sales in units 15 000 All sales are on credit. Covaccine requires 6 units of material A. Raw material A cost price is R5 per unit. Direct labour hours per unit is 1 hour at the cost of R8 per hour. Additional information: At 01 January 2020, stocks were as follows: Product Covaccine 800 units Raw material A 4 500 units At 31 December 2020, stocks were as follows: Product Covaccine 880 units Raw material A 4 950 units Prepare the following: 1.Direct labour budget

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 1PA: Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and...

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Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 per pound, 3 oz of solution costing $3 per ounce, and 30 minutes of direct labor at a labor rate of $18 per hour. Desired inventory levels are: Â Prepare a sales budget, production budget. direct materials budget for silicon and solution, and a direct labor budget.
Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The companys policy is to have enough material on hand to equal 10% of the next months production needs and to maintain a finished goods inventory equal to 25% of the next months production needs. What is the budgeted cost of purchases for March?
Covax Ltd manufactures one product known as Covaccine. The following information relate to the preparation of the budget for the year ended 31 December 2020: Sales budget for the product Covaccine Expected selling price per unit R150 Expected sales in units 15 000 All sales are on credit. Covaccine requires 6 units of material A. Raw material A cost price is R5 per unit. Direct labour hours per unit is 1 hour at the cost of R8 per hour. Additional information: At 01 January 2020, stocks were as follows: Product Covaccine 800 units Raw material A 4 500 units At 31 December 2020, stocks were as follows: Product Covaccine 880 units Raw material A 4 950 units Prepare the following: 1.Sales budget 2.Production budget 3.Raw material budget 4.Direct labour budget
Softlan Limited manufactures one product known as Eco1. The following information relates to the preparation of the budget for the year to 31 March 2020: 1) Sales budget details for product Eco1: Expected selling price per unit: RM100. Expected sales in units: 10,000. All sales are on credit terms. 2) Eco1 requires 5 units of raw material E and 10 units of raw material C. E is expected to cost RM3 per unit and C RM4 per unit. All goods are purchased on credit terms. 3) Two departments are involved in producing Eco1: machining and assembly. The following information is relevant: Direct labour per unit of product (hours) Direct labour rate per hour RM Machining 1.00 6 Assembling 0.50 8 4) The finished production overhead costs are expected to amount to RM100,000. 5) At 1 April 2019, 800 units of Eco1 are expected to be in stock at a value of RM52,000, 4,500 units of raw material E at a value of RM13,500, and 12,000 units of raw materials at a value of RM48,000. Stocks of both finished…
Shanell Industrial Limited makes and sells one product, which has the following standard variable production costs per unit. Rs. Direct materials cost (2 kg at Rs.25 per kg) 50 Direct labour cost (3 hours at Rs.40 per hour) 120 Variable production overhead costs (Rs.10 per labour hour) 30 The budgeted selling price per unit is Rs.400 for the coming two years. The production and sales budgets for the next two years are as follows: 2019 2020 Production in units 50,000 60,000 Sales in units 40,000 70,000 There is no opening inventory at the beginning of 2019. Budgeted and actual costs are as follows. Fixed production overhead costs Rs.1,080,000…
A company manufactures one product (A) for which budgeted details for the forthcoming period are as follows: Product A £ per unit Materials Labour (£16 per hour) 6 32 Production overhead of £60,000 is absorbed on a labour-hour basis. The budgeted output is 8,000 units of product A. The company adds a mark up of 20% to total production cost in order to determine its unit selling prices. What is the selling price per unit of product A? OA £54.60 OB. £19.50 OC. £45.43 OD. £25.67
Kiwenkira & Son Ltd makes and sells a single product marketed under a brand name Kiwetonic for the West African sub region and has total production capacity of 30,000 units per month. The budget for January 2020 contained the following information: Normal capacity (Units) 27,000 Variable costs per unit: Production (GH¢) 110 Selling and distribution (GH¢) 25 Fixed overheads: Production (GH¢) 756,000 Selling and administration (GH¢) 504,000 The actual operating data for January 2020 is as follows: Production 24,000 units Sales at GH¢250 per unit 22,000 units Opening inventory of finished goods 2,000 units During the month of January 2020, the variable factory overheads exceeded the budget by GH¢120,000. Required: Prepare profit statement for the month of January using: Marginal costing: and Absorption costing techiques Reconcile the difference in profits (if any), under the two…
Kiwenkira & Son Ltd makes and sells a single product marketed under the brand name Kiwetonic for the West African sub-region and has a total production capacity of 30,000 units per month. The budget for January 2020 contained the following information: Normal capacity (Units) 27,000 Variable costs per unit: Production (GH¢) 110 Selling and distribution (GH¢) 25 Fixed overheads: Production (GH¢) 756,000 Selling and administration (GH¢) 504,000 The actual operating data for January 2020 is as follows: Production 24,000 units Sales at GH¢250 per unit 22,000 units Opening inventory of finished goods 2,000 units During the month of January 2020, the variable factory overheads exceeded the budget by GH¢120,000. Required: a) Prepare profit statement for the month of January using: Marginal costing: and Absorption costing techniques b) Reconcile the difference in profits (if any), under the two techniques
Zizi plc uses a standard absorption costing system and produces and sells product 8W. The standard cost card is below: Product 8W (€ per unit) Direct material (5 per kg) 15 Direct labour (6 per hour) 12 Fixed manufacturing overhead 10 Total production cost 37 Standard profit 13 Standard selling price 50 * Absorption rate based on standard labour hours Budgeted and actual production and sales units for december 2020 were as follows: Budget Actual Production 1,100 900 Sales 1,000 800 Actual data for December 2020 were as follows € Direct material purchases 1,200 kgs costing 12,000 Direct materials used 1,100 kgs Direct labour hours 500 hours costing 6,000 Fixed manufacturing overhead 5,000 Sales revenue 30,000 An analysis of the Direct labour hours shows that the 500 hours that were paid for 50 were idle time due to a machinery breakdown. There were no inventories of Direct materials or finished products (planned or actual) at the…
The budget of Bisby plc shows total production overheads of £78m. They plan to work 6m hours and total labour costs for the year are £26m. Which of the following can be a suitable absorption rate for the production overhead?   i. £4 per hour ii.  £13 per hour iii.  £3 per labour cost iv.  £13 per labour cost Select one: a. i and iii b. i and iv c. ii and iii d. ii and iv
(b) Breakthrough Ltd provided the following standard cost card. Its budgeted production and sales for December 2021 were 10,000 units @ TZS 200,000 per unit. Budgeted fixed overheads were Tshs 200 millian. The standard cost card of breakthrough Ltd. TZS Direct material 4 kg of A at Tshs 5,000 per kg 2 kg ol B at Tshs 20,000 per kg Direct labour (5. hours per unit of production at Tshs15,000 per hour) Variable overhead (5 hours at Tshs 5,000 per labour hour) 20,000 40,000 75,000 25.000 Total variable cost 160.000 The company has also provided the actual results for December 2021. (AI the units produced during the period were sold. There is no closing inventory). TZS 000 TZS 000 2,089,500 Sales 10,500 units at Tshs199,000 Direct material A. 40,000kg at Tshs 6,000 per kg B. 23,000kg at Tshs 20,000 per kg Direct Labour 63.000 houcs at Tshs 15,000 per hour Variable overheads 63,000 hours at Tshs 4,000 per hour 240,000 460,000 945,000 252.000 (1,897,000) Actual contribution 192,500 Actual…
The Management Accountant of Kafululu Plc has prepared the following budget information for theyear ending 31st December 2022 for product A. Annual Fixed Costs K270,000.00 Variable costs per unit K90.00 Contribution to sales ratio(C/S) 75% Annual budget units 1,500 Required:a) Calculate the contribution per unit for Product A. b) Calculate the Unit Selling Price for Product A. c) Calculate the Break Even Point for Product A. d) Calculate the margin of safety in Units and in percentage terms. e) If the Selling Price per Unit is reduced by 10%, variable cost per Unit is increased to K100.00and Fixed costs remain unchanged, calculate:i. The new Breakeven Point. ii. The total units that should be sold in order to make a profit of K450,000 in 2020.(