cost project.pptx
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M Industries produces television antennas and has estimated sales for six models over the next six months. They provided raw material requirements and beginning and ending inventory estimates to prepare a production budget and calculate raw material purchase requirements. The production budget showed the units needed for each model based on sales, ending inventory, and opening inventory. This was used to calculate the pounds of raw materials X and Y needed for each model. The totals for X and Y needed for all production were summed. The raw material purchase budget was calculated by taking the total materials needed for production, adding the ending inventory, and subtracting the beginning inventory.
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cost project.pptx
- 1. BUGETTING
- 2. QUESTION NO 03: M industries produces television antennas and has estimated sales for the next six month period as follows: Raw material requirements for each model are : Model Number Units 1001 200 1002 150 1003 425 2001 175 2002 325 2003 215 Raw material in pounds Model Number X Y 1001 5 2 1002 7 2 1003 10 3 2001 4 1.5 2002 6 2 2003 8 2.5
- 3. Estimated inventories are Beginning Ending Raw materials X 5,000 lbs 7,000 lbs Y 2,000 lbs 1,500 lbs Finished goods 1001 50 units 40 units 1002 25 25 1003 75 60 2001 15 20 2002 35 35 2003 20 20
- 4. Required: Prepare a production budget, by product. Compute raw materials purchase requirement, by raw material.
- 5. M.INDUSTRIES production BUDGET MODEL NO: 1001 1002 1003 2001 2002 2003 sales 200 150 425 175 325 215 + ending inventory 40 25 60 20 35 20 -Opening inventory (50) (25) (75) (15) (35) (20) Budgete d producti on 190 150 410 180 325 215
- 6. MATERIAL REQUIRED FOR X AND Y MODEL 1001: 190 X*5= 950 190 Y*2= 380 MODEL 1002: 150 X*7 =1050 150 Y*2= 300 MODEL 1003: 410 X*10= 4100 410 Y*3= 1230
- 7. MODEL 2001: 180 X*4= 720 180 Y*1.5= 270 MODEL2001: 325 X*6= 1950 325 Y*2= 650 MODEL 2003 215 X*8= 1720 215 Y*2.5= 537.5 Total X and Y: X=10490 Y=3367.5
- 8. MATERIAL PURCHASED BUDGET X Y Required for production 10490 3367.5 +Ending raw material 7000 1500 - Beginning raw material (5000) (2000) Material purchased 12490 2867.5