Task 2 (Budgeting)Aqua Safe produces water purifiers for domestic use. The production expenses for the production of5,000 units of water purifiers in its factory is given in Table T2:MaterialsLabourVariable OverheadsFixed OverheadsTable T2Administrative Expenses (5% Variable)Selling Expenses (20% Fixed)Distribution Expenses (10% Fixed)Total Cost of Sales (for 5,000 units)420021001400900100057048010650You are required to prepare a flexible budget for the production of 7000 units and 14000 units ofwater purifiers.

Flexible budgets are prepared for estimating future revenue and expenses at various levels of…

Answered: You are required to prepare a flexible…

Business

Accounting

You are required to prepare a flexible budget for the production of 7000 units and 14000 units of water purifiers.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Company A produces a component used in the production of one of the company’s main products.The costs are budgeted as follows:Amount per unit (R) Amount per 5 000 units (R)Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit. Determine whether the company should make or buy the component. In arriving at your solution clearly show all your workings.
Company A produces a component used in the production of one of the company’s main products. The costs are budgeted as follows: Amount per unit (R) Amount per 5 000 units (R) Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit. Required: Q.3.1 Determine whether the company should make or buy the component. In arriving at your solution clearly show all your workings, as marks will be allocated. Q.3.2 State five qualitative aspects that the company must evaluate before making a…
Company A produces a component used in the production of one of the company’s main products.The costs are budgeted as follows:Amount per unit (R) Amount per 5 000 units (R)Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit.Required:Q.3.2 State five qualitative aspects that the company must evaluate before making a decision in Q.3.1 above.Q.3.3 Briefly explain the difference between avoidable costs, differential costs and opportunity costs. Provide one example of each cost.Q.3.4 List two examples of scenarios where relevant costing can be used effectively in decision‐making.
Valhalla Company manufactures small table lamps and desk lamps. The following shows the activities per product: Units Setups Inspections Assembly (dih) Small table lamps 8,000 10,000 32,000 8,000 Desk lamps 16,000 30,000 14,000 46,000 Use the following information prepared by Valhalla Company. Total Budgeted Activity Activity-Base Usage Activity Cost Setups 40,000 $160,000 Inspections 46,000 230,000 Assembly (dlh) 54,000 324,000 a. Determine the activity rates for each activity. Setups per setup Inspections per inspection Assembly per DLH b. Determine the activity-based factory overhead per unit for each product. Round your answers to two decimal places, if necessary. Small table lamp Desk lamp
Check n Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information. Lenses Mirrors Units produced Material moves per product line Direct-labor hours per unit 23 23 17 160 160 The total budgeted material-handling cost is $70,840. Required: 1. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount? 2. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one mirror would be what amount? 3. Under activity-based costing (ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the…
Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Units Setups Inspections Assembly (dlh) 2,700 4,000 8,000 8,000 Small table lamps Desk lamps Activity Setups 9,150 15,250 44,400 44,400 Total Activity-Base Usage Budgeted Activity Cost 12,000 $102,000 24,400 129,320 77,700 310,800 Inspections Assembly (dlh) The total factory overhead to be allocated to desk lamps is Oa. $456,995 Ob. $228,498 Oc. $587,565 Od. $326,425
4. Running Shorts Co. makes two products: A and B. In the folding department, budgeted information is as follows: Budgeted indirect labor costs in the workshop: $150,000 Budgeted depreciation expenses of equipment: $50,000 Budgeted direct labor costs: $100,000 Budgeted units produced: 50,000 The company allocates indirect labor costs based on direct labor costs and allocates depreciation expenses of equipment based on units produced. The actual direct labor costs for product A are $60,000 and 40,000 units of product A are produced. How much is the manufacturing overhead of product A in the folding department? 120,000 90,000 130,000 40,000
Blue-Pool Company is an electric utility which has two service departments, Accounting and Maintenance. It also has two operating departments, Generation and Transmission. Maintenance Department costs are allocated based on maintenance hours of service. Accounting Department costs are allocated based on accounting hours of service provided. Budgeting costs and other data for the following year are as follows: Accounting Maintenance Generation Transmission Budgeted costs R100 000 R200 000 R600 000 R400 000 Maintenance hours of service 600 7 200 4 800 Accounting hours of service 500 2 000 4 500 3 500 The step method is used to allocate service department costs, with the accounting department being allocated first. Calculate the amount of accounting department costs that needs to be allocated to the generation department. A. R42 860 B. R38 000 C. R57 143 D. R45…
Automatic Irrigation, Inc. is preparing its manufacturing overhead budget for the next year. Relevant data consist of the following Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Total Control Units to be produced (by quarters): 8,000 7,000 10,000 12,000 37,000 Direct labor time: 1 hour per unit Variable overhead costs per direct labor hour: Indirect Materials $0.80; Indirect Labor $1.10; and Maintenance $0.60. Fixed overhead costs per quarter: Supervisory salaries $19,250; depreciation $3,000; and maintenance $2,250. Required Prepare the manufacturing overhead budget for the next year showing quarterly data and the total amounts for the full year.
E4-6 Computing unit costs at different levels of production French Fragrances, Ltd. budgeted for 12,000 bottles of perfume Belle during May. The unit cost of Belle was $20, consisting of direct materials, $7; direct labor, $8; and factory overhead, $5 (fixed, $2; variable, $3). a. What would be the unit cost if 10,000 bottles were manufac- tured? (Hint: You must first determine the total fixed costs.) b. What would be the unit cost if 20,000 bottles were manufactured? c. Explain why a difference occurs in the unit costs.
Required information [The following information applies to the questions displayed below.] Tent Master produces Pup tents and Pop-up tents. The company budgets $252,000 of overhead cost and 42,000 direct labor hours. Additional information follows. Per Unit Pup tent Pop-up tent Activity Assembly Electricity Materials purchasing Total Selling Price Direct Materials $ 20 25 Activity Cost Driver Direct labor hours (DLH) Machine hours (MH) Purchase orders (PO) Required 1 $78 73 Budgeted Cost $ 168,000 Required 2 24,000 60,000 $ 252,000 Assembly Electricity Materials purchasing Required information 2. The following actual activity usage produced 10,000 Pup tents and 6,000 Pop-up tents. Allocate overhead cost to Pup tents and to Pop-up tents and compute overhead cost per unit for each product. Pup tents 30,000 4,000 150 Activity Cost Driver Direct labor hours (DLH) Machine hours (MH) Purchase orders (PO) Activity Usage Complete this question by entering your answers in the tabs below.…
PROBLEM SOLVING: This will help you develop your analytical capabilities and exercise judgement. Instructions: Answer the following questions and provide the necessary requirements. Problem 1 Justine Company budgeted overhead cost'at P180,000 for the current period. In addition, they budgeted costs for factory rent at P215,000, cots for depreciation of office equipment at P12,000 costs for office rent at P92,000, and costs for depreciation of factory equipment at P38,000. All these were based upon estimated machine hours of P80,000. At the end of the period. The factory overhead control account has a balance of P373,875. Actual machine hours were 74,000. Required: 1. Compute the over-underapplied factory overhead for the period. 2. Journalize the over-underapplied factory overhead.