Solution-Generate the direct labour budget

Generate the direct labour budget

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Question - Fashion Ltd is a small retailer in the East Midlands that sells T-shirts. They have a single T-shirt design each year, and in 2020, they are due to sell 1,000 Tshirts in May at £12 each. Sales of T-shirts are predicted to rise at 10% per month after May 2020 (until October 2020) and the selling price of T-shirts will remain constant.

Required -

(a) Produce the sales budget (in units and £'s) for Fashion Ltd from May to September 2020. (2 marks)

(b) State the production budget for T-shirts (in units) for the quarter June to August 2020. Closing inventory needs to represent 30% of sales units in the following month.

(c) Generate the direct labour budget (in hours and £'s) for the quarter June to August 2020. Direct labour costs £12 per hour, and each T-shirt takes 0.4 hours to produce.

Reference no: EM132542935

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Generate the direct labour budget

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Reference no: EM132542935

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