I QUESTIONS (18 marks) (22 minutes) MaNdovu Limted manutactures and sells a sing

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QUESTIONS (18 marks) (22 minutes) MaNdovu Limted manutactures and sells a singie product. The detals of the product are as folows The selling price per unit is R260. The budgeted sales volume far each quarter of 2019 is as follows: Quarter Units 20 000 25 000 30 000 20 000 . Each unit of tinished goods requires four kilograms of raw materials. This material is purchased from an outside supplier a R25 per klogram. Ench unit requires three direct labour haurs and abaur is ourrently paid R30 per hour. Inventories of finishad goadks The company requres its closing imentory of finished goods to be equal to 20% of the next quarter's salcs Opening inventory or tinished goods for the fret quarter is 2 000 units. . Inventories of raw materia's. The closing inventory af raw materials is expected to be 10% of the next quarter's production Opening inventory of raw maleriale for the first quarter is 10 000 klograms Variable manufacturing overmeads vary with direct labour hours. Overhead rale per hour is R10.00 REQUIRED Prepare the fellowing operational budgets fer 2019 quarter 1 and quarter 2: 6.1 Sales budget 6.2 Production budge. 6.3 Material purchase budget 6.4 Drect labaur budgei 6.5 Variabla manufacturing ovarhead budgat [18) TOTAL: [100 MARKS]

Explanation / Answer

Solution:-

(1) Sales Bdt:-

(2) Production bdt:-

(C) Material Purchase Bdt:-

  

Qtr 3 production = (20000*20%) + 30000 - 6000 = 28000

Particulars Qtr 1 Qtr 2 Units sales 20000 25000 SP 250 250 Sales value Units* SP 5000000 6250000

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