Question

Section B Question No. 02 - Compulsory Live Lid produces two products namely as R and N. You are given following information 1) Budgeted direct cost per unit for two products for the year 2017 are as follows. Rs. 400 500 450 Material A-2 Kg at Rs.200 per kg 2.5 Kg at Rs.200 per kg Material B - 1.5 Kg at Rs. 300 per kg 2 Kg at Rs. 300 per kg Direct Labour - 3 hours at Rs. 600 per hour 2 hours at Rs. 600 per hour 600 1800 1200 2) Production overhead is made up as follows: Rs.

Answer 1

I am solving first five questions

1. Sales budget in quantity and value
Product	Quantity	Selling price per unit	Sales value (Rs.)
R	6000 units	Rs. 3500	21,000,000
N	2000 unis	Rs. 3900	7,800,000
	Total sales		28,800,000

2. Production budget in quantity
		Product R	Product N
Sales		6000	2000
Add: Closing stock	1500	500
Total Quantity required	7500	2500
Less: Opening stock	1000	300
Production	6500	2200

3. Material usage budget in quantity
		Product R	Product N	Total
Production	6500	2200
Material A	13000	5500	18500
		(6500*2)	(2200*2.5)
Material B	9750	4400	14150
		(6500*1.5)	(2200*2)

4. Material purchase budget in quantity and value
		Material A	Material B
Usage in production		18500	14150
Add: Closing stock		2000	2500
		20500	16650
Less: Opening stock		2500	2000
Purchase (Quantity)		18000	14650
Purchase price (Rs.)		200	300
Purchase value (Rs.)		3,600,000	4,395,000

5. Labour budget
		Product R	Product N
Production	6500	2200
Direct labour hours	19500	4400
		(6500*3)	(2200*2)
Wage rate per hour	Rs. 600	Rs. 600
Wages payable	11,700,000	2,640,000