BUDGETING. 7. : BUDGETING. 1. BUDGETING. SALES BUDGET.

Running head: BUDGETING 1
BUDGETING

BUDGETING 2
SALES BUDGET
Number of units to be sold 20000 30000 35000
Unit Selling Price
$
115.00
$
115.00
$
115.00
Sales Budget
$
2,300,000.00
$
3,450,000.00
$
4,025,000.00
PRODUCTION BUDGET
January February March
Projected Sales 20000 30000 35000
Add:
Desired Closing Finished Goods
Inventory 18000 21000 25200
Less:
Opening Inventory of Finished
goods 15000 18000 21000
Units required to be produced 23000 33000 39200
DIRECT MATERIAL
PURCHASE BUDGET
Working Note
January February March
Units required to be produced 23000 33000 39200
Direct material requirement:
Wood (meters) 46000 66000 78400
Components 138000 198000 235200
Actual Working
January February March
Wood (meters) needed for
production 46000 66000 78400
Add:
Desired Closing Direct Material
Inventory 33000 39200 46800
Less:
Opening Inventory of Direct
Material 23000 33000 39200
Meters to be purchased 56000 72200 86000
Cost meters ($ 10 per meter) 560000 722000 860000
Components
Components needed for
production 138000 198000 235200
Add:
Desired Closing Direct Material
Inventory 99000 117600 140400

BUDGETING 3
Less:
Opening Inventory of Direct
Material 69000 99000 117600
Components to be purchased 168000 216600 258000
Cost components ($ 5 per meter) 840000 1083000 1290000
DIRECT LABOUR BUDGET
Direct Material Labour January February March
Units of output 23000 33000 39200
Number of hours per unit of
output 3 3 3
Total Labour Hours 69000 99000 117600
Rate per hour 14.25 14.25 14.25
Total Labour Cost 983250 1410750 1675800
OVERHEAD BUDGET (IN
DOLLARS)
Manufacturing Overhead January February March
Variable overhead
Supplies 69000 99000 117600
Power 20700 29700 35280
Moving Material 13800 19800 23520
Maintenance 17250 24750 29400
Wood Waste 10350 14850 17640
Others 34500 49500 58800
Total variable manufacturing
overhead 165600 237600 282240
Fixed Overhead
Maintenance 30000 30000 30000
Supervision 16000 16000 16000
Depreciation 195000 195000 195000
Communication Cost 5000 5000 5000
Taxes 12000 12000 12000
Others 80000 80000 80000
Total Fixed manufacturing
overhead 338000 338000 338000
Total Manufacturing overhead 503600 575600 620240
SELLING AND
ADMINISTRATIVE
EXPENSE
(IN
DOLLARS)
January February March
Variable
Commissions 138000 198000 235200
Shipping 69000 99000 117600