Question

Part A (80 Marks) Perpetual Clocks is a manufacturer of clocks. It makes two products: Homeware Clocks - medium wall clocks made from Plastics. Custom Clocks-large free-standing clocks made from Tasmanian oak . The budgeted direct cost inputs for each product in 2018 are: I Homeware line Custom line 0 Plastic framing 4 square metres 0 10 square metres Tasmanian oak framing Plastic links 8 0 Tasmanian oak links 0 8 6 hours 10 hours Direct manufacturing labour

question is a. revenues budget
                      b.production budget in units
                      c. direct materials usage budget
                      d. direct materials purchases budget
                      e. direct manufacturing labour budget
                      f. manufacturing overhead budget
                      g.ending inventories budget( direct materials and finished goods)
                      h. cost of goods sold budget

Answer 1

Part 1a – Sales Budget

Sales Budget
	Unit Sales Volume	Unit Selling Price	Total Sales
Homeware line clock	1480	$2,040	$3,019,200
Custom Line clock	780	$3,200	$2,496,000
Total Revenue from Sales			$5,515,200

Part 1b. –

Production Budget in units
	Homeware line clock	Custom Line clock
Expected Sales Units	1480	780
Plus: Target Ending Finished Goods Inventory	60	30
Total Needs	1540	810
Less: Beginning finished goods inventory	40	10
Required Production in units	1500	800

Part 1c –

Direct Materials Purchases Budget
	Plastic Framing	Plastic links	Tasmanian Oak framing	Tasmanian Oak links
Units required for production:
Homeware line	6000 (1500*4)	12000 (1500*8)
Custom line			8000 (800*10)	6400 (800*8)
Plus: Desired Ending Inventory	48	160	80	88
Total	6048	12160	8080	6488
Less: Estimated Beginning inventory	80	200	60	80
Total units to be purchased	5968	11960	8020	6408
Unit Price	$320	$24	$250	$36
Total direct materials to be purchased	$1,909,760	$287,040	$2,005,000	$230,688

Part 1d –

Direct labor Cost budget
	Homeware line	Custom line	Total
Hours required for Production	9000 (1500*6)	8000 (800*10)
Hourly Rate	$60	$60
Total Direct labor cost	$540,000	$480,000	$1,020,000

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