Budgeting and Budgetary Control793- 1,20,000 x 1.20= 1,44,000= 1,98,000 1,44,000 00 ille talor- Rs. 54,000.Total cost for 1,20,000 unitsto yaidiovTotal fixed costsDEI O00.08.1 aldertDroblem 16.7 The expenses budgeted for production of 10,000 units in a factory are furnishedbelow:Numindus non i 1qsd oonanotrisM znq e lo 19pen Per unit 8.at moldoolelicolt suntenoo of bau od ol ste tada oningoli zld tol cotamiu Rs.nbud nwolloi ortogbud imoo 70ninub boeu nd oMaterialsLabourVariable overheadsFixed overheads (Rs. 1,00,000)Variable expenses (direct)252010Selling expenses (10% fixed)0OLa Distribution expenses (20% fixed)SOBAdministration expenses (Rs. 50,000)13 nmd5Total cost of sale per unit (to make and sell)155euoil tis 00(000,1 1o ameraniPrepare a budget for production of 8,000 units and 6,000 units of showing total and per units(I.C.W.A.)cost. Assume that administration expenses are rigid for all levels of production.SOLUTIONTotal cosRsxil o oto moti dona to ziedeaAFLEXIBLE BUDGETA lapl rvn ilod n Inaoms omea bovit asal avolnalehce15008,000 units6.000 unitsT bleTotal od ingi Per unit - Totalcost000RS.) (0Ssldn Per unitcostcostcost(Rs.)(Rs.)I (Rs.)MaterialsLabourTUonljagon 5.60.00025004.20.000 dalie 70.002.00.000 00.06 25.00 00 1,50,000 Se 25.0070.00Direct expensesVariable overheadsFixed overheads40.0005.001,60,000 US 3an20.0012.5030,0001,20,0001,00,0005.0012000O000 1,00,00020.0016.67Selling expenses:n todFixed 0030.10 00 13,000 00 1.63 SI1.70000.0013,00070,2002.17VariableFixedDistribution93,600000.000,06000,0011.70expenses:FixedVariableAdministration expenses.000,E14.000 000.14,00033,6001.75O2.33Tana5.6044,8005.60(Fixed)50,0006.2550,0008.33Total00 12,75,400 0Te159.43 810,00,800166.80794Cost Accounting Principles and PracticeWorking Notes:1. Total selling expenses: 10.000 x Rs. 13 e- Rs. 1,30,000- RsFixed: 10% of Rs. 1,30,0001.000

Name: Budgeting and Budgetary Control793- 1,20,000 x 1.20= 1,44,000= 1,98,0
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Description: Budgeting and Budgetary Control793- 1,20,000 x 1.20= 1,44,000= 1,98,000 1,44,000 00 ille talor- Rs. 54,000.Total cost for 1,20,000 unitsto yaidiovTotal fixed costsDEI O00.08.1 aldertDroblem 16.7 The expenses budgeted for production of 10,000 units i

Preparation of production budget helps the business entity in determining the total cost incurred…

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Problem 16.7 The expenses budgeted for production of 10,000 units in a factory are furnished below: Bo 1ogan Per unit 8.at moldo 00 ot boau od ol ste tadi ongot ald tol stami Rs.b wollo ars togbud nimos 70niub boeu d on Materials Labour Variable overheads Fixed overheads (Rs. 1,00,000) Variable expenses (direct) Selling expenses (10% fixed) Distribution expenses (20% fixed) Administration expenses (Rs. 50,000) 25 20 10 13 teno Tamen sch Total cost of sale per unit (to make and sell) 155 euoil Prepare a budget for production of 8,000 units and 6,000 units of showing total and per units cost. Assume that administration expenses are rigid for all levels of production. (I.C.W.A.)

Problem 16.7 The expenses budgeted for production of 10,000 units in a factory are furnished below: Bo 1ogan Per unit 8.at moldo 00 ot boau od ol ste tadi ongot ald tol stami Rs.b wollo ars togbud nimos 70niub boeu d on Materials Labour Variable overheads Fixed overheads (Rs. 1,00,000) Variable expenses (direct) Selling expenses (10% fixed) Distribution expenses (20% fixed) Administration expenses (Rs. 50,000) 25 20 10 13 teno Tamen sch Total cost of sale per unit (to make and sell) 155 euoil Prepare a budget for production of 8,000 units and 6,000 units of showing total and per units cost. Assume that administration expenses are rigid for all levels of production. (I.C.W.A.)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter13: Budgeting And Standard Costs

Section: Chapter Questions

Problem 13.17E: Capital expenditures budget On August 1, 20Y4. the controller of Handy Dan Tools Inc. is planning...

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Capital expenditures budget On August 1, 20Y4. the controller of Handy Dan Tools Inc. is planning capital expenditures for the years 20Y5-20Y8. The controller interviewed several Handy Dan executives to collect the necessary information for the capital expenditures budget. Excerpts of the interviews are as follows: Director of Facilities: A construction contract was signed in May 20Y4 for the construction of a new factory building at a contract cost of $9,000,000. The construction is scheduled to begin in 20Y5 and completed in 20Y6. Vice President of Manufacturing: Once the new factor)' building is finished, we plan to purchase $3-6 million in equipment in late 20Y6. I expect that an additional $500,000 will lx-needed early in the following year (20Y7) to test and install the equipment before we can begin production. If sales continue to grow, I expect we'll need to invest another half million in equipment in 20Y8. Vice President of Marketing: We have really been growing lately. I wouldn't be surprised if we need to expand the size of our new factory building in 20YS by at least 25%. Fortunately, we expect inflation to have minimal impact on construction costs over the next four years. Additionally, 1 would expect the cost of the expansion to Ik- proportional to the size of the expansion. Director of Information Systems: We need to upgrade our information systems to wireless network technology. It doesn't make sense to do this until after the new factory building is completed and producing product. During 20Y7, once the factor)' is up and running, we should equip the whole facility with wireless technology. I think it would cost us $400,000 today to install the technology. However, prices have been dropping by 10% per year, so it should be less expensive at a later date. President: I am excited about our long-term prospects. My only short-term concern is financing the $5,000,000 of construction costs on the portion of the new factor)' building scheduled to be completed in 20Y5. Use the interview information above to prepare a capital expenditures budget for Handy Dan Tools Inc. for the years 20Y5-20Y8.
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