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Budget Num

The document outlines financial data for a manufacturing company, including fixed, semi-variable, and variable expenses, totaling $98,00,000. It requires the preparation of a flexible budget and profit forecasts at various capacity levels, as well as break-even analysis for a factory producing plastic buckets. Additionally, it includes the need for flexible budgeting for overheads based on specified variable and fixed costs at different production capacities.

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13 views3 pages

Budget Num

The document outlines financial data for a manufacturing company, including fixed, semi-variable, and variable expenses, totaling $98,00,000. It requires the preparation of a flexible budget and profit forecasts at various capacity levels, as well as break-even analysis for a factory producing plastic buckets. Additionally, it includes the need for flexible budgeting for overheads based on specified variable and fixed costs at different production capacities.

Uploaded by

vani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The following data is available in a manufacturing company for a yearly period.

Fixed Expenses

Wages and Salaries 9,50,000

Rent/Rates and Taxes 6,60,000

Depreciation 7,40,000

Sundry Admin Expenses 6,50,000

Semi-variable Expenses at 50% Capacity

Maintenance and Repairs 3,50,000

Indirect Labor 7,90,000

Sales Department Salaries, etc. 3,80,000

Sundry Admin Salaries 2,80,000

Variable Expenses

Materials 21,70,000

Labor 20,40,000

Other Expenses 7,90,000

Total 98,00,000

You should assume that the fixed expenses remain constant for all levels of production.

Semi-variable expenses remain constant between 45% and 65% capacity, increasing by 10%
between 65% and 80% capacity, and by 20% between 80% and 100% capacity.

The sales at various levels of capacity are the following:

50% Capacity 100


60% Capacity 120
75% Capacity 150
90% Capacity 180
100
Capacity 200
%
For this task, prepare a flexible budget for the year and forecast the profit at 60%, 75%, 90%,
and 100% capacity.

2. A factory engaged in manufacturing plastic buckets is working at 40% capacity and


produces 10,000 buckets per month. The present cost break up for one bucket is as under:
Materials Rs.10 Labour Rs.3 Overheads Rs.5 (60% fixed) The selling price is Rs.20 per
bucket. If it is desired to work the factory at 50% capacity the selling price falls by 3%. At
90% capacity the selling price falls by 5% accompanied by a similar fall in the price of
material. You are required to prepare a statement the profit at 50% and 90% capacities and
also calculate the break‐ even points at this capacity production
3. The budgeted output of a industry specializing in the production of a one product at the
optimum capacity of 6,400 units per annum amounts to Rs. 1,76,048 as detailed below:

The company decides to have a flexible budget with a production target of 3,200 and 4,800
units Prepare a flexible budget for production levels of 50% and 75%. Assuming, selling
price per unit is maintained at Rs. 40 as at present, indicate the effect on net profit.
4. Prepare a flexible budget for overheads on the basis of the following data. Ascertain the
overhead rates at 60% and 70% capacity.
Variable overheads: At 60% capacity(Rs)
Material 6,000
Labour 18,000
Semi‐variable overheads:
Electricity: 30,000 40% Fixed 60% variable
Repairs: 80% fixed 3,000 20% Variable 3,000
Fixed overheads:
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Total overheads 93,000
Estimated direct labour hours 1,86000

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