Assignment

Hash Ltd makes two products - P1 and P2. Sales for next year are budgeted at 5000 units of Pl ' ' \"00 units of P2. Planned selling prices are GH230 and GHy.' 300 respectively. Hash to have the following opening inventory and required closing inventory levels of nished tof2 P l P 2 Units Units Opening inventory 100 50 Required closing inventory 1100 50 Each product goes through two production processes, whittling and fettling. Budgeted production data for the products are as follows: 1' l P 2 Finished Products: Raw materials X: kilos per unit 12 12 Raw materials Y: kilos per unit 6 B Direct labour hours per unit 8 12 Machine hours per unit: whittling 5 8 Machine hours per unit: fettling 3 4 Raw materials inventories X Y Opening inventory (kilos) 5000 5000 Planned closing inventory (kilos) 6000 1000 Standard rates and prices Direct Labour rates per hour GH 7 Material X purchase price per kilo GHc 2 Material Y purchase price per kilo GH e 5 You should assume that the following production overhead absorption rates have already been established. Production overhead absorption rates Variable GH 1 per direct labour hour Fixed (me 8 per direct labour hour Budgeted administration and marketing overheads are GH225.000. The opening statement of nancial position is expected to be as follows Gila om Non-Current Assets 950.000 Wants; Inventory 66.000 Trade receivables 260.000 Cash 25.099 151M Total Assets M Wilt: Equity Stated Capital \"91,000 Willis! Trade payables 86,000 Other short-tenn liabilities 24.000 1 10,000 Total Equity and Liabilltles 1M '1' Non-current assets in the balance sheet are expected to increase by GH40,000. but no change is expected in trade receivabies, trade payables and other short-term liabilities. 4. There are no plans at this stage to raise extra capital by issuing new shares or obtaining new loans. '1- The company currently has an overdra facility of GH300.000 with its bank. 4' Assume all sales are for cash and all expenses are settled with cash Required: Prepare the following budgets for the budget period. a. Sales budget Production budget in units Materials usage and purchases budgets Direct labour cost budget Machine utilisation budget Production cost budget Budgeted income statement Budgeted statement of nancial position as at the end of the period. amongst