Management Accounting: Budgeting Process Improvement

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student
Name of the University
Authors Note
Course ID

1MANAGEMENT ACCOUNTING
Table of Contents
Answer to Part 1:........................................................................................................................2
Answer To A:.............................................................................................................................2
Answer To B:.............................................................................................................................2
Answer To C:.............................................................................................................................2
Answer To D:.............................................................................................................................3
Answer To E:.............................................................................................................................3
Answer To F:..............................................................................................................................4
Answer To G:.............................................................................................................................4
Answer To H:.............................................................................................................................4
Answer To I:..............................................................................................................................5
Answer To J:..............................................................................................................................5
Answer To K:.............................................................................................................................6
Answer To L:.............................................................................................................................6
Answer to Part 2:........................................................................................................................8
References:...............................................................................................................................10

2MANAGEMENT ACCOUNTING
Answer to Part 1:
Answer To A:
Revenue Budget for 2018:
Particulars Amount
Projected Sales Volume (in units) 2000
Estimated Retail Price $ 800
Budgeted Sales Revenue $ 16,00,000
Answer To B:
Production Budget (in units) for 2018:
Particulars Amount
Projected Sales Volume 2000
Add: Closing Finished Goods Inventory 300
2300
Less: Opening Finished Goods Inventory 200
Budgeted Production Volume 2100
Answer To C:
Direct Material Usage & Purchase Budget:
Particulars Amount
Oak Tops:
Production Volume 2100
Material Requirement per desk (sq.cm.) 3
Total Oak Tops Usage (sq.cm.) 6300
Add: Closing Oak Top Inventory 24
6324
Less: Opening Oak Top Inventory 40
Budgeted Purchase Volume of Oak Top (in sq.cm.) 6284
Unit Price $ 120

3MANAGEMENT ACCOUNTING
Budgeted Purchase of Oak Tops $ 7,54,080
Oak Legs:
Production Volume 2100
Material Requirement per desk (in units) 4
Total Oak Legs Usage (in units) 8400
Add: Closing Oak Legs Inventory 80
8480
Less: Opening Oak Legs Inventory 100
Budgeted Purchase Volume of Oak Legs (in units) 8380
Unit Price $ 7
Budgeted Purchase of Oak Tops $ 58,660
Total Budgeted Purchase $ 8,12,740
Answer To D:
Direct Manufacturing Labour Budget:
Particulars Amount
Budgeted Production Volume 2100
Direct Manufacturing Labour hours per desk 3
Total Manufacturing Labour Hours 6300
Labour Cost per hour $ 55.00
Total Direct Labour Cost $ 3,46,500
Answer To E:
Manufacturing Overhead Budget:
Particulars Amount
Total Manufacturing Labour Hour 6300
Variable Manufacturing Overhead Rate $ 20
Total Variable Manufacturing Overhead $ 1,26,000
Fixed Manufacturing Overhead $ 50,000
Budgeted Manufacturing Overhead $ 1,76,000