The following data relates to a company's operating budget for its next operating year Sales price per unit () 26 Sales volume junits 39,000 Costs Materials 30,000 Labour E 33800 Energy 37.000 Depreciation D 105.000 The budget has been prepared using the following assunptions Materials costs are variable Lubour costs are semi-varable with a fwed element of E15000 Depreciation is a fed cost. An allowance for an energy price increase of 11% has aready been inchaded in the enegy costs The company now wishes to revise the data to incorperate the following updated assumptions Selling prices wi be reduced by s The sales volume will increase by 10% The rise in the energy prices should be revised to 7% What will be the company's new materials cost for the year?
The following data relates to a company's operating budget for its next operating year Sales price per unit () 26 Sales volume junits 39,000 Costs Materials 30,000 Labour E 33800 Energy 37.000 Depreciation D 105.000 The budget has been prepared using the following assunptions Materials costs are variable Lubour costs are semi-varable with a fwed element of E15000 Depreciation is a fed cost. An allowance for an energy price increase of 11% has aready been inchaded in the enegy costs The company now wishes to revise the data to incorperate the following updated assumptions Selling prices wi be reduced by s The sales volume will increase by 10% The rise in the energy prices should be revised to 7% What will be the company's new materials cost for the year?
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 7E: Starburst Inc. has the following items and amounts as part of its master budget at the 10,000-unit...
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:The following data relates to a company's operating budget for its next operating year
Sales price per unit (E)
26
Sales volume units)
39,000
Costs:
Materials ()
30,000
Labour (E)
33.800
Energy (E
37,000
Depreciation (E)
105,000
The budget has been prepared using the following assumptions
Materials costs are variable.
Labour costs are semi-variable with a fxed element of 15,000.
Depreciation is a foxed cost.
An allowance for an energy price increase of 11% has already been inchuded in the enegY costs
The company now wishes to revise the data to incorporate the following updated assumptions:
Selling prices will be reduced by B%
The sales vokume will increase by 10%
The rise in the energy prices should be revised to 7%
What will be the company's new materials cost for the year?
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