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    Colin - Book

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    rizwan
    The document contains sales, production, material usage, labor, overhead and profit budgets for products Alpha and Sigma. It budgets total sales revenue of $1,074,000 from projected unit sales. Manufacturing budgets include material, labor, and overhead costs totaling $1,047,869 to produce the units. Selling and administrative expenses are budgeted at $69,000, resulting in projected net income.

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    Colin - Book

    Uploaded by

    rizwan
    33 views15 pages
    The document contains sales, production, material usage, labor, overhead and profit budgets for products Alpha and Sigma. It budgets total sales revenue of $1,074,000 from projected unit sales. Manufacturing budgets include material, labor, and overhead costs totaling $1,047,869 to produce the units. Selling and administrative expenses are budgeted at $69,000, resulting in projected net income.

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    The document contains sales, production, material usage, labor, overhead and profit budgets for products Alpha and Sigma. It budgets total sales revenue of $1,074,000 from projected unit sales. Manufacturing budgets include material, labor, and overhead costs totaling $1,047,869 to produce the units. Selling and administrative expenses are budgeted at $69,000, resulting in projected net income.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    33 views15 pages

    Colin - Book

    Uploaded by

    rizwan
    The document contains sales, production, material usage, labor, overhead and profit budgets for products Alpha and Sigma. It budgets total sales revenue of $1,074,000 from projected unit sales. Manufacturing budgets include material, labor, and overhead costs totaling $1,047,869 to produce the units. Selling and administrative expenses are budgeted at $69,000, resulting in projected net income.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    of 15

    Sales Budget

    Product Unit to Selling Total Revenue


    be Sold Price

    Alpha 8,500 100 850,000


    Sigma 1,600 140 224,000
    Total 1,074,000
    Production Budget

    Particulars Department No.1 Department No.2


    (Alpha) (Sigma)

    Units to be sold (Sales budget) 8,500 1,600

    Add: Desired Ending Finished goods 1,870 90

    Total Finished goods available for sale 10,370 1,690

    Less: Expected Opening Finished goods (170) (85)

    Units to be Produced 10,200 1,605


    Direct Material Usage Budget

    Department No. 1 (ALPHA)


    Material Units Per unit Total Unit Total
    Consumption Consum. Price Consum.
    (in units) (in Value)
    Material X 10,200 10 102,000 1.80 183,600
    Material Y 10,200 5 51,000 4.00 204,000
    Total 387,600

    Department No. 2 (SIGMA)


    Material Units Per unit Total Unit Total
    Consumption Units Price Price
    (in units) (in Value)
    Material X 1,605 8 12,840 1.80 23,112
    Material Y 1,605 9 14,445 4.00 57,780
    Total 80,892

    Total material X required (102,000 + 12,840)


    Total material Y required (51,000+ 14,445)
    Direct Material Purchase Budget
    Material X Material Y

    Total units required for production 114,840 65,445

    Add: Desired ending R/material 10,200 1,700

    Total raw material required 125,040 67,145

    Less:Expected opening R/material (8,500) (8,000)

    Total raw material purchase 116,540 59,145

    Purchase Price per unit 1.80 4

    Total amount of Purchases 209,772 236,580


    Factory Overhead Budget

    Factory overhead budget Variable overhead rate Overhead Total


    Department 1 Department 2 Department 1 Department 2

    Variable Factory overhead (Controllable FOH) ALPHA SIGMA


    102,000 24,075
    hours hours
    Indirect material 0.30 0.20 30,600 4,815
    Indirect labour 0.30 0.30 30,600 7,223
    Power (Variable portion) 0.15 0.10 15,300 2,408
    Maintenance (Variable portion) 0.05 0.10 5,100 2,408
    81,600 16,853 98,453

    Fixed Factory overhead (Non-controllable FOH)

    Depreciation 25,000 20,000


    Supervision 25,000 10,000
    Power (Fixed portion) 10,000 500
    Maintenance (Fixed portion) 11,400 799
    71,400 31,299 102,699

    Total Factory Overhead 153,000 48,152 201,152

    Total Direct Labour hours 102,000 24,075

    Budgeted departmental overhead rate 1.50 2.00


    Direct Labor budget
    Department No.1 Department No.2 Total
    ALPHA SIGMA
    Budgeted Production (in units) 10,200 1,605

    Budgeted time required to


    produce one unit 10 15

    Total Time required to


    manufactured units (in hours) 102,000 24,075 126,075

    Rate per Direct labor hour 3.00 3.0

    Total amount of wages 306,000 72,225 378,225


    Annual Selling and Administration Budget

    Selling:
    Salaries 18,500
    Commission 15,000
    Car Expenses 5,500
    Advertising 20,000 59,000

    Administrative expenses:

    Stationary 1,000
    Salaries 7,000
    Miscellaneous 2,000 10,000
    Total Operating Expenses 69,000
    Manufacturing Budget

    Alpha Sigma Total


    Direct Material
    Material X 183,600 23,112 206,712
    Material Y 204,000 57,780 261,780

    Direct Material used 387,600 80,892 468,492

    Direct Labour 306,000 72,225 378,225


    Prime Cost 693,600 153,117 846,717
    -
    Factory Overhead -
    Variable cost 81,600 16,853 98,453
    Fixed Cost 71,400 31,299 102,699
    -
    Total Factoy overhead 153,000 48,152 201,152

    MANUFACTURING COST 846,600 201,269 1,047,869


    Per unit cost of ALPHA and SIGMA

    ALPHA SIGMA
    Nos. of unit Nos. of unit
    Direct material consumed used Rate / unit Per unit cost used
    Material X 10 1.80 18 8
    Material Y 5 4 20 9
    1 Per unit cost of material 38

    2 Direct labor used 10 3 30 15

    Prime cost per unit 68

    3 Factory overhead 10 1.50 15 15


    Per unit cost of Product 83
    SIGMA

    Rate / unit Per unit cost


    1.80 14.40
    4 36
    50

    3 45

    95

    2 30
    125.40
    Budgeted Profit and Loss account

    Sales (Sales Budget)


    Cost of Goods Sold
    a) Raw material (at start) (Purchase budget/ BS) 47,300
    Add: Purchases (Purchase budget) 446,352
    Total raw material available for use 493,652
    Less: Raw material (at end) (Purchase budget) (25,160)
    Raw material Consumed 468,492

    b) Direct Labor (D/lab budget) 378,225

    c) Factory overhead (FOH Budget) 201,152

    Manufacturing Cost / COGM 1,047,869


    Add: Finished goods (at start) (Production budget) 24,769
    Total finished goods available for sale 1,072,638
    Less: Finished goods (at end) (Production budget) (166,496)
    COST OF GOODS SOLD
    GROSS PROFIT
    Less: Operating Expenses
    Selling and administrative expenses (Operating exp Budget)
    NET INCOME

    WORKING
    Cost of Finshed goods (at START) ALPHA SIGMA
    Finished goods (at start) - in units 170 85
    Per unit cost 83 125.40
    Cost of Finished goods (at Start) 14,110 10,659 24,769

    Cost of Finshed goods (at End)


    ALPHA SIGMA Total Cost
    Finished goods (at End) - in units 1,870 90
    Per unit cost 83 125.40
    Cost of Finished goods (at End) 155,210 11,286 166,496
    Per unit manufacuturu

    1,074,000

    (906,142)
    167,859

    (69,000)
    98,859
    Projected Balance Sheet

    Fixed Assets:
    Land 42,500
    Buildings and equipment 323,000
    Less: Accumulated depreciation (108,750) 214,250 (FOH + Operating Exp)
    Fixed Assets: 256,750

    Current Assets:
    Stock, Finished goods 166,496
    Raw material 25,160

    Debtors 70,000 (Sales+Cash budget)


    Cash 49,794 (Cash budget)
    311,450

    Less: Current Liabilities


    Creditors 76,971 (Purchase bud. + Indirect materia
    234,479 Cash budget)
    Net Assets 491,229

    Represented by Shareholder's interest


    300,000 ordinary shares of Re. 1 each 300,000
    Reserves 92,369
    Profit & Loss account 98,859
    491,228
    Operating Exp) (63,750+45000)

    Cash budget) (72250+1074000-1076250)

    se bud. + Indirect material - (62200+446352+35415-466996)


    Cash Budget

    Quarter Total
    1 2 3 4

    CASH INFLOWS:
    Reciept from customer 250,000 300,000 280,000 246,250 1,076,250

    CASH OUTFLOWS:
    Payment for material 100,000 120,000 110,000 136,996 466,996
    Payment for wages 100,000 110,000 120,000 161,547 491,547
    Other cost and expenses 30,000 25,000 18,004 3,409 76,413
    230,000 255,000 248,004 301,952 1,034,956

    Surplus / (Difficiency) 20,000 45,000 31,996 (55,702) 41,294

    Add: Cash (at start) 8,500 28,500 73,500 105,496 8,500

    Cash (at end) 28,500 73,500 105,496 49,794 49,794

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