ACCT2102 - Lecture 9 - Lecture Exercise - Solution

# ACCT2102 - Lecture 9 - Lecture Exercise - Solution -...

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Lecture Exercise – Solution 1. Sales Budget Budgeted sales = Number of units sold x unit price Budgeted sales = 100,000 x \$800 = \$80,000,000 2. Production Budget (units) Budgeted Sales: 100,000 + Ending inventory FG: 3,500 - Beginning inventory FG: (2,500) Production: 101,000 units 3. Direct materials budget Wheels (101,000 x 2 x \$20): \$4,040,000 Components (101,000 x 1 x \$70): \$7,070,000 Frames (101,000 x 1 x \$50): \$5,050,000 Total Direct Materials used : \$16,160,000 + Ending inventory DM: \$ 175,000 - Beginning inventory DM: \$ (140,000) Total DM purchases : \$16,195,000

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4. Direct Labour Budget Hours Cost DL Assembly (101,000 x 1.5hrs/u x \$25/hr): 151,500 \$3,787,500 DL Testing (101,000 x 0.15hrs/u x \$15/hr): 15,150 \$ 227,250 Total Direct Labour: 166,650 \$4,014,750 5. Manufacturing Overhead Budget, BOHR and COGM Overhead costs 2013 Budgeted Cost Indirect labour (x 1.05): \$3,787,497 Maintenance (x 1.05): \$1,008,000 Supplies (x 1.05): \$2,019,990 Insurance (x 0.97): \$1,371,580 Rent: \$12,093,733 Depreciation: \$5,050,000 Total OH costs: \$25,330,800 BOHR = Total OH Costs / Total DL hours (allocation base) BOHR = \$25,330,800 / 166,650 = \$152/DLH

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