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Bradman Ltd has the following budgeted unit sales figures for the six months from July 2005: July 800 August 600 September 700 October 900 November 1,000 December 900 The company makes and sells one product only, the unit costs and selling price of which are: Selling price N$70 Material A 2 kilos at N$5 per kilo N$10 Material B 1.5 kilos at N$6 per kilo N$9 Labour 2 hours at $10 per hour N$20 Variable overhead $8 per hour N$16 The following information is also available: Customers are allowed one month’s credit. Production takes place in the month of sale. Closing stocks of finished product are equal to 10% of the next month’s sales. Materials are purchased in the month before use and are paid for two months after purchase. Wages and variable overhead are paid for in the month of production. Fixed overhead is N$3,000 per month (including depreciation of N$500) payable in the month incurred. The opening cash balance at 31 August is expected to be N$20,000 in hand. Required: (a) Prepare for September only: (i) Sales Budget (in units and N$) (ii) Production Budget (units only) (iii) Raw Material Purchases Budget for both A and B (kilos and N$). (b) Prepare the Cash Budget for the months of September and October only.

Bradman Ltd has the following budgeted unit sales figures for the six months from July 2005: July 800 August 600 September 700 October 900 November 1,000 December 900 The company makes and sells one product only, the unit costs and selling price of which are: Selling price N$70 Material A 2 kilos at N$5 per kilo N$10 Material B 1.5 kilos at N$6 per kilo N$9 Labour 2 hours at $10 per hour N$20 Variable overhead $8 per hour N$16 The following information is also available: Customers are allowed one month’s credit. Production takes place in the month of sale. Closing stocks of finished product are equal to 10% of the next month’s sales. Materials are purchased in the month before use and are paid for two months after purchase. Wages and variable overhead are paid for in the month of production. Fixed overhead is N$3,000 per month (including depreciation of N$500) payable in the month incurred. The opening cash balance at 31 August is expected to be N$20,000 in hand. Required: (a) Prepare for September only: (i) Sales Budget (in units and N$) (ii) Production Budget (units only) (iii) Raw Material Purchases Budget for both A and B (kilos and N$). (b) Prepare the Cash Budget for the months of September and October only.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...
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QUESTION 1 Bradman Ltd has the following budgeted unit sales figures for the six months from July 2005: July 800 August 600 September 700 October 900 November 1,000 December 900 The company makes and sells one product only, the unit costs and selling price of which are: Selling price N$70 Material A 2 kilos at N$5 per kilo N$10 Material B 1.5 kilos at N$6 per kilo N$9 Labour 2 hours at $10 per hour N$20 Variable overhead $8 per hour N$16 The following information is also available: Customers are allowed one month’s credit. Production takes place in the month of sale. Closing stocks of finished product are equal to 10% of the next month’s sales. Materials are purchased in the month before use and are paid for two months after purchase. Wages and variable overhead are paid for in the month of production. Fixed overhead is N$3,000 per month (including depreciation of N$500) payable in the month incurred. The opening cash balance at 31 August is expected to be N$20,000 in hand. Required: (a) Prepare for September only: (i) Sales Budget (in units and N$) (ii) Production Budget (units only) (iii) Raw Material Purchases Budget for both A and B (kilos and N$). (b) Prepare the Cash Budget for the months of September and October only.
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