ACC3214 - Advance Management Accounting (BAF) TEST (20%) - August 2019 Answer ANY (2) Questions (Duration: 1hour & 30 minutes) Question 1 BAT Ltd manufactures two types of finished goods: Ace and Bit. Sales for the forth-coming year are expected to be 16,800 units of product Ace and 19,200 units of product Bit. The planned selling price for Ace and Bit is $40 and $60 respectively. The company has an opening inventory of 900 units of Ace and 800 units of Bit. The company expects to hold an ending inventory equivalent to one month of sales for each of the products. There was damaged items in the opening inventory of 200 units for each of the finished products which was not accounted yet in the books. The company also anticipates stock losses due to movement error of 300 units for product Ace and 400 units for product Bit during the year. The following data is given about the raw materials required to produce product Ace and Bit and other related production and non-production costs. Ace Bit Per unit of finished good: Direct Material - X 2.0 kg 2.5 kg Direct Material - Y 1.5 kg 2.0 kg Direct Labour time (minutes) 90 120 Y Direct Materials - Desired closing inventory - Opening inventory X 2,000 kg 2,100 kg 2,000 kg 1,400 kg Standard Rates and Prices Direct labour rate Direct Material - X Direct Material - Y Production Overheads - Variable $10.00 per hour $5.00 per kg $6.00 per kg $7.00 per direct labour hour $10.00 per direct labour hour - Fixed Non-production overheads - Variable - Fixed $300,000 $500,000 Required: Prepare the following operational budgets: a) Sales Budget b) Production Budget c) Raw Material Usage and Purchase Budget d) Direct Labour Budget e) Total Overheads Budgets (4 marks) (5 marks) (8 marks) (4 marks) (4 marks) (Total: 25 marks)