Scribd Logo
Upload

Welcome to Scribd!

  • 1 views

    Functional Budget Seminar Question

    Uploaded by

    sirconcept

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Functional Budget Seminar Question

    Uploaded by

    sirconcept
    1 views1 page

    Original Title

    Functional Budget Seminar Question(1)

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1 views1 page

    Functional Budget Seminar Question

    Uploaded by

    sirconcept

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Question 1

    The following information has been collected from various managers regarding forecasts for the
    forthcoming financial period:

    Sales information

    Sales in units are forecast as follows: Average selling price per unit: £50

    January 8,100

    February 9,100

    March 9,300

    April 9,700

    May 9,100

    Production information

    Opening stocks of finished goods at 1st January are 8,800.

    Closing stocks at the end of each month should equal 1.5 times the following month’s sales
    level.

    Raw materials information

    Each unit produced requires 6 kgs of material at a cost of £8 per kg.

    Opening stocks of raw materials at 1st January are 6,400 kgs.

    The company wishes to increase closing stock levels by 5% each month.

    Labour information

    Each unit produced requires 6 labour hours and costs £16 per hour.

    Production overheads information

    Absorbed on the basis of £4 per direct labour hour.

    Administration overheads information

    Administration overheads are forecast at £10,000 for January, but are expected to rise by 5%
    each month.

    Selling overheads information

    Selling overheads are forecast to be 5% of sales revenue for each month.

    REQUIRED: Prepare the functional budgets for the financial quarter January to March using the
    information above.

    You might also like