90.2K

Verified Solution

Link Copied!

Solve this urgently

Q.3 Company XYZ Ltd produces and sells one product. The company is preparing its budget for its forthcoming year, which ends in December. The following fixed costs are planned to be incurred: Rs.000 Production overheads 720 Administration overheads Selling overheads 240 480 The planned selling price per unit and variable costs per units for the product are as follows: 188 Rs. 106 Selling price Variable costs Direct material -10 kg Direct labour-6hours Variable overheads-6 hours 40 30 12 The company has set a profit objective of Rs.480,000 for the forthcoming year. Each of the months of March. June. September and November are expected to achieve 10% of the planned sales quantity. The remainder of the planned sales quantity is expected to be achieved equally in all of the other months. Each of the months of March. June. September and November are expected to achieve 10% of the planned sales quantity. The remainder of the planned sales quantity is expected to be achieved equally in all of the other months. The production of each month's sales is planned as follows: - 40% of each month's sales are produced in the month before sale 60% of each month's sales are produced in the month of sale. The purchase of the direct materials required for each month's production is planned as follows: 50% of each month's direct materials requirements are purchased in the monh before the materials are required 50% of each month's direct materials requirements are purchased in the month the materials are required. The stock of direct materials and finished goods at 1 January should be assumed to be consistent with the above policies. Required: (a) Compute the total budgeted sales quantity(units) for the forthcoming year (b) Compute the budgeted sales quantity for each of the months of May and November (c) Prenare the production quantity ( units) budget for each of the first three months of the forthcoming year (d) Prepare the direct materials purchases budget ( in kilogram and value) for the first three months of the forthcoming year

Answer & Explanation Solved by verified expert

See Answer