Question
Assessment requirements: ABC Manufacturing Limited makes one product, the Ultra2020. The Management Accountant has gathered the following budgeted information for 2021: Sales Units 10,000 Selling
Assessment requirements: ABC Manufacturing Limited makes one product, the Ultra2020. The Management Accountant has gathered the following budgeted information for 2021: Sales Units 10,000 Selling Price 300 Finished Goods Inventory (Units) Opening Inventory 500 Closing Inventory 1,500 Budgeted Production Data: Raw Material Kg per Unit 5kg Raw Material Price per Kg 10 Direct Labour Hour per Unit 8 Hr Direct Labour Rate per Hour 11 Raw Materials Inventories Opening Inventory 4,000kg Closing Inventory 4,000kg Fixed Production OAR 9 (Overhead Absorption Rate) Budgeted Administration & Marketing Overheads 450,000 Depreciation 35,000 Equipment Purchase 280,000 No change is expected in receivables, payables and other short term liabilities. There are no plans to raise extra capital by issuing new shares or obtaining new loans. The company has an overdraft facility of 250,000 with its bank. The Opening Balance Sheet at 01/01/2021 is expected to be as follows:
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