Cost of advertisement on products on television (14) Audit fees (15) Chief accountant’s salary (16) Wages of operation in cutting department (17) Cost painting advertising slogans on delivery vans (18) Wages of storekeepers in material store (19) Wages of fork lift truck drivers who handle raw materials (20) Developing a new product at the laboratory 5. Complete the following table to show the fixed cost, variable costs and the total costs for each level of production Units Fixed Cost GH¢ Variable Cost GH¢ Total Cost GH¢ 2,000 24,000 5,000 29,000 4,000 6,000 8,000 10,000 BUDGET AND BUDGETARY CONTROL 1. Explain the following terms as used in budget and budgetary control. i) Budget period ii) Zero based budgeting iii) Flexible budget iv) Fixed budget v) Incremental budgeting 2. Identify and explain any three objectives of preparing a budget.
3. Briefly explain three advantages of bottom up budgeting and describe two situations where top down budgeting would be more applicable.Which one will you recommend to any company you will work in future 4. Asona Limited makes two products. Product A and product B. Sales for next year are budgeted at 5,000 units Of A and 1,000 units of B. Planned selling prices are GH¢ 65.00 and GH¢ 100.00 respectively. Asona Limited has the following Opening Inventory and required closing Inventory. Product a Product B Opening Inventory 1000 50 Required Closing Inventory 1,100 50 You are also given the following data about the materials and labour required to produce chocolates and pineapples. Product A Product B Kg of raw material X per finished product 12 12 Kg of raw material Y per unit of product 6 8 Direct Labour hours per unit of finished product 8 12 Direct Materials Raw Materials X Y Desired closing Inventory in Kg 6,000 1,000 Opening Inventory in Kg 5,000 500 Standard rates and prices Direct Labour GH¢2.20 per hour Raw material X GH¢0.72 per hour Raw Material Y GH¢ 1.56 per Kg
Product Overheads: Variable GH¢1.54 per abour hr. Fixed: GH¢0.54 perlabour hour You are refund to prepare the following: (a) Sales Budget (b) Production budget (c) Raw Material Usage Budget (d) Raw Material Purchase Budget ( Units and Cost) (e) Labour Budget (f) Production Overhead Budget 5. Silver bird limited manufactures and sells two products Thingone and Thing two. In December 2012, Silver bird’s Budget Department gathered the following data in order to prepare budgets for 2013. 2013 projected sales Product Units Price Thingone 60,000 GH¢ 165 Thingtwo 40,000 GH¢ 250 2013 Inventories in unit Product January 1, 2013 December 31 st ,2013 Thingone 20,000 25,000 Thingtwo 8,000 9,000 To Produce 1 unit of thingone and thingtwo; the following direct materials are used. Amount used per unit Direct Material Quantity Thingone Thingtwo A Kg 4 5 B Kg 2 3 C Kg 0 1 Projected data for 2013 with respect to direct materials are as fellows. Direct Materials Anticipated Purchase price GH¢ Expected Inventories 1/1/2013 Target Inventories 31/12/13 A 12 32,000 Kg 36,000 Kg B 5 29,000 Kg 32,000 Kg
C 3 6,000 units 7,000 Kg Projected direct manufacturing labour requirement and rate for 2013 are as fellows.
- Spring '20
- Dr. ASRAVOR