Reference no: EM132566209
Question - The management accountant of Mega Ltd, a local manufacturing firm, is currently preparing the operating and financial budgets for the year ending 30 June 2021 for discussion and approval in the next board meeting in June 2020. She has just collected the following budgeted financial data from various departmental managers and would like to seek your assistance in preparing some of the budgets:
1) Selling price per unit:
Product X $4,000
Product Y $9,000
2) Sales demand:
Product X 1,000 units
Product Y 500 units
3) Direct materials required per unit:
Product X A1 B2
5 kg. 3 kg.
Product Y 2 kg. 6 kg.
4) Direct material costs:
A1 $30 per kg.
B2 $20 per kg.
5) Direct labour hours:
Product X 4 hours
Product Y 10 hours
6) Direct labour rate per hour $90
7) Raw material inventories: 1/7/2020 30/6/2021
A1 (at $30 per kg.) 400 kg. 300 kg.
B2 (at $20 per kg.) 200 kg. 500 kg.
8) Finished goods inventories: 1/7/2020 30/6/2021
Product X 200 units 100 units
Product Y 50 units 150 units
9) Variable overhead per direct labour hour $200
10) Fixed overhead per annum $4,800,000
Required - Prepare the following manufacturing budgets for the year ending 30 June 2021:
(a) Production budget (in units).
(b) Raw material usage and purchase budgets (in units and dollars).
(c) Cost of goods manufactured (in dollars).