Maurice Tutor

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Category > Accounting Posted 08 Aug 2017 My Price 13.00

foot or fraction

  1. Belt plc sells men’s and boy’s belts that are cut to order. Each foot or fraction thereof sells for £2. Small belts average 2 feet and large belts average 3 feet in length. The leather is purchased from a local tannery at 90 pence per foot. The buckles are purchased at 50 pence for the small size and 75 pence for the large size.

Direct labour requirements are 10 minutes for a small belt and 15 minutes for a large belt. Skilled labour costs £5 per hour.

Machine requirements are 5 minutes for a small belt and 6 minutes for a large belt.

Machine time costs £6 per hour.

Sales are expected to be 10% more than last year. Last year, the company’s sales during October and November were as follows:

 

October

November

Small belts

3000

2600

Large belts

1400

1500

The inventories at 30 September 2004 are as follows: leather, 1800 ft; small buckles, 2000; large buckles 1200.

In future the company desires month’s end inventories as follows:

Finished goods: 10% of current month’s sales

Leather: 40% of current month’s production requirement

Small buckles: 30% of current month’s production requirement

Large buckles: 30% of current month’s production requirement

  1. Prepare a production budget for small and large belts for October and November 2004.

  2. Prepare a purchases budget for October and November 2004.

  3. Prepare a wages budget for October and November 2004.

  4. Comment on the difficulty of obtaining data when production budgets are being prepared.

Answers

Maurice Tutor
(5)
Status NEW Posted 08 Aug 2017 01:08 PM My Price 13.00

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