Question
Coco-True Ltd expects to manufacture and sell ladys shoes. It has the following information for its 2021 budget. Sales price of a pair of shoes
Coco-True Ltd expects to manufacture and sell ladys shoes. It has the following information for its 2021 budget.
- Sales price of a pair of shoes is $100.
- Product costs per pair of shoes:
Direct materials (2 metres @ $15) | $30.00 |
Direct labour (1 hour @ 15.00) | $15.00 |
Overheads | $5.00 |
| $50.00 |
- Budgeted sales for the second six month period are:
Month | Number of pairs |
July | 6,000 |
August | 5,500 |
September | 6,500 |
October | 7,000 |
November | 7,000 |
December | 9,000 |
- Inventory policy on ending inventory balances:
Type | Quantities |
Finished goods | 20 % of the pairs required for the next months sales. Expected balance on 1 July 2021 is 800 pairs. |
Direct materials | 40% of the materials required for the next months sales. Balance on 1 July 2021 is 3,000 metres. |
Required:
| (4 marks) |
| (4 marks) |
| (3 marks) |
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