The Monaj manufacturing company is planning to prepare the functional budget for the decision purpose from the following information: Total sales for…
2024 · Solved Question with Answer
The Monaj manufacturing company is planning to prepare the functional budget for the decision purpose from the following information:
Total sales for 7 months are 200,000 units. Selling price per unit of Rs 60.
Other detailed information is given below:
| Month | Falgun | Chaitra | Baisakha | Jestha | Ashad | Shrawan | Bhadra |
|---|---|---|---|---|---|---|---|
| Sales in units | 25,000 | 30,000 | 30,000 | 30,000 | 20,000 | 30,000 | 35,000 |
Purchase: One unit of finished goods required 2 kg of raw material at the cost of Rs 10 per kg.
Wages: Per unit of finished goods will need 3 labour hours and the cost per labour hour will be Rs 2.
Overhead: Variable manufacturing overhead will be Rs 5 per unit of production and fixed manufacturing cost Rs 120,000 per year. Administrative expenses 5% of sales and selling expense @ Rs 2 Per unit sold.
Inventory management policy:
Raw materials are required to meet of the next month's consumption of material and finished goods are 80% of the following month's sales units.
Required:
Following the four-month Budget from Baishak to Shrawan:
a. Sales Budget
b. Production budget
c. Material consumptions and purchase budget
d. Labour cost budget
e. Manufacturing overhead budget
f. Operating expenses budget (Administrative expenses and selling expense)
g. Cost of goods sold budget
h. What is the operating budget? What are the main component?