MANCOSA: BCOM FINANCIAL MANAGEMENT YEAR 3 64 1.2 REQUIRED Use the information gi

Question

MANCOSA: BCOM FINANCIAL MANAGEMENT YEAR 3 64 1.2 REQUIRED Use the information given below to prepare the following budgets of Product Chip and p for October 2018. Provide separate monetary columns for each product in each budget. Production Budget (units) Direct Labour Budget (Rand) 1.2.1 1.2.2 INFORMATION Chipnik Limited manufactures and sells two products, viz. Chip and Nik. The following inform available to determine the budget requirements for October 2018: Projected sales for October and November 2018 1. November October 15 000 units of Chip at R60 each 5 000 units of Nik at R120 each 12 000 units of Chip at R44 each 4 000 units of Nik at R84 each in a closing inventory equal to 20% of the budgeted sales The policy of Chipník Limited is to mainta the following month. 2. of 3. Direct labour hours required to produce one unit of each product and the rate per hour are as f Chip: 1 hour at R12 per hour Nik: 2 hours at R15 per hour.

Explanation / Answer

This budget to be considered as it is not on October 2018 company starting operation, but an ongoing production.(Closing inventory of Septembr will be there as 20% of September sale)

Production Budget

Projected Sales is given now on preparing production budget keep in mind. 20% of item will be there inventory and 20% for next month to be produced

Production Budget

Direct Labour Budget

Hope it helps you

Chip Nik October Opening (sept closing)-20%oct (15000*0.2) 3,000 units (5000*0.2) 1000units Closing (nov sales's 20%) (12000*0.2) 2,400 units (4000*0.2) 800 units Production Budget (Sales-opening+closing) (15000-3000+2400) 14,400 (5000-1000+800) 4,800

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