Applied Management Accounting: Budgeting and Financial Analysis

APPLIED MANAGEMENT
ACCOUNTING

TABLE OF CONTENT
QUESTION 1...................................................................................................................................3
a)..................................................................................................................................................3
b)..................................................................................................................................................3
c)..................................................................................................................................................4
d)..................................................................................................................................................4
QUESTION 2...................................................................................................................................4
QUESTION 3...................................................................................................................................4
a)..................................................................................................................................................4
b)..................................................................................................................................................5
QUESTION 4...................................................................................................................................6
a)..................................................................................................................................................6
b)..................................................................................................................................................6
c)..................................................................................................................................................7
d)..................................................................................................................................................7
REFERENCES................................................................................................................................8

QUESTION 1
a)
Preparation of Production Budget in units
Particular April
(in $)
May
(in $)
June
(in $)
Budgeted sales units 800 1000 1200
Less Opening stock of
finished goods
-600 -750 -900
Add Closing stock of
finished goods
750
(1000* 75%)
900
(1200* 75%)
1050
(1400* 75%)
Total 950 1150 1350
b)
Preparation of direct material purchase budget in Kg and dollars
Particular April
(in $)
May
(in $)
June
(in $)
Units to be produced
(from production
budget)
950 1150 1350
Direct material per
unit
3 3 3
Total direct material 2850 3450 4050

needed for production
Add Closing direct
material
500
(1000* 50%)
600
(1200* 50%)
700
(1400* 50%)
Less Opening direct
material
-1200 -500 -600
Total direct material
purchase (in Kg)
2150 3550 4150
Cost per dollar (kg) 8 8 8
Total direct material
cost (in dollars)
17200 28400 33200
c)