accounting

Accounting and Finance Management

Assignment 2
Semester: 3

Prepared by: Osoba Seun
Student Number: Sc-Kl-00021763
Email Address: [e-mail]
Date submitted: 17/01/2014

Question 1
Sales Budget

September ($)
October ($)
Budgeted sales (units)

9,500
Selling price per unit

$12
Total sales
90,000
114,000

Schedule of expected cash collections:

October ($)
Account receivables b/d 54,000
October sales (114,000 x 0.30) 34,200
Total cash collections on sales 88,200

Production Budget October
Budgeted sales 9,500
+ Desired ending inventory 1,100
Total needs 10,600
- Beginning inventory (600)
Required production 10,000

Direct Materials Budget October
Required production 10,000
Raw materials need for a unit x 4.5
Production needs 45,000
+ Ending inventory 2,500
Total needs 47,500
- Beginning Inventory 1,700
Raw materials to be purchased 45,800
Cost of raw materials x $0.10 $4,580

Cash Disbursement for raw materials

Accounts payable $1,950
October Purchases (4,580 x 50%) $2,290
Total cash disbursements for raw materials $4,240

Direct Labor October
Units to be produced 10,000
Direct labor hours per unit x 0.2
Total direct labor hours needed 200
Direct labor cost per hour x 12
Total direct labor cost 2,400
$600/week
Manufacturing Overhead October ($)
Variable manufacturing overhead 11,500
Fixed manufacturing overhead (0.90 x 10,000) 9,000
Total manufacturing overhead 20,500
Less depreciation (2,800)
Cash expense for manufacturing overhead 17,700

Unit product cost (Using Absorption costing system): Quantity Cost Total
Direct materials 4.5 liters $0.10 $0.45
Direct