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Manufacturing Budget

The Korara Company manufactures and sells two products, Gadget $1$ and Gadget $2.$

The following data has been gathered for the year ending $30$ June $2017$:

Product Project Sales Inventory in Units Units Price Opening Closing

Gadget $1$

$7,150$

$$130$

$3,000$

$2,075$ Gadget $24,350$ $$1258251,025$

To produce one unit of Gadget $1$ and Gadget $2,$ the following materials are used:

Raw Material Unit Gadget $1$ Gadget $2$ A kg $2\mathrm{.}503$

B

kg

$2$

$3$ C each $12$

Projected data in respect of raw materials are as follows:

Raw Material Cost Opening Inventory Closing Inventory A $$5\mathrm{.}503,250$ kg $3,500$ kg

B

$$4\mathrm{.}25$

$3,000$ kg

$3,200$ kg C $$6\mathrm{.}25700$ ea $500$ ea

Projected data in respect of direct labour rates are as follows:

Product Hours per unit Rate per hour Gadget $14\mathrm{.}50$ $$13\mathrm{.}50$

Gadget $2$

$3\mathrm{.}00$

$$15\mathrm{.}25$

Overhead is applied at the rate of $$5\mathrm{.}50$ per direct labour hour.

Required:

Prepare the following budgets for year ending $30$ June $2017$ as per company policies and procedures:

a$)$

Sales Budget;

b$)$

Production Budget;

c$)$

Raw Materials Usage Budget;

d$)$

Raw Materials Purchases Budget $($in units and dollars$)$;

e$)$

Direct Labour Budget;

f$)$

Manufacturing Overhead Budget;

g$)$

Cost of Production Budget;

h$)$

Cost of Goods Sold Budget; and

i$)$

Budgeted Trading Statement.

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