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MQ2&3 - Master Budget

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20 views1 page

MQ2&3 - Master Budget

Uploaded by

jartiaga34
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Adeanvie Manufacturing Co. manufactures two products: A and B.

The company predicts a sales volume


of 10,000 units for product A and ending finished goods inventory of 2,000 units. While for product B
the predicted sales volume are 12,000 and finished goods inventory of 3,000 units. Company’s finished
goods beginning inventory is 4,000 units of for product A and 3,000 units of product B. Unit selling price
of Product A and B is P200 and P250 respectively. The cost of the beginning and ending inventory for
Product A is P450 and Product B is P600.

The company practice the JIT costing of raw materials. Below are the required raw materials to
manufacture these products.

Raw Cost per Required for Product INVENTORY (units)


Materials kilo A B Beginning Ending
X ₱20 2 KG 3,000 2,500
Y ₱25 1 KG 1 KG 2,000 1,200
Z ₱13 3 KG 3,500 3,000

Product A requires three hours of cutting time and two hours of finishing time. Product B requires one
hour of cutting time and two hours of finishing time. The direct labor rate for cutting is P50 per hour
and P70 per hour for finishing.

Manufacturing Overhead are as follows: Indirect Materials and supplies P3.00 per unit produced. Other
Indirect Labor P15 per labor hour and Other Fixed manufacturing overhead cost P1750,000, inclusive of
factory equipment depreciation of P350,000. A total of Operating and admin expenses is P9,500,000
with P1,000,000 depreciation for office furniture and fixtures and P500,000 depreciation for office
equipment.

The company maintain a cash year ending balance of P6,000,000. A P300,000 was collected of prior
year sales. Current year collection Product A is 75% from sales and Product B is 80% collection from
sales. The company has a bank credit line of P6,000,000. Income tax rate: 30%

REQUIRED:

Quiz 2:

1. Production budget products A and B.


2. Raw Materials Purchases Budget
3. Direct Labor Budget
4. Budgeted Manufacturing Overhead

Quiz 3:

1. Sales budget for product A and B


2. Cash budget
3. Cost of goods manufactured and sold
4. Income Statement of Adeanvie Manufacturing Co.

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