Management Accounting

Live Lad produces two products namely as R and N. You are given following information. D Budgeted direct cost per unit for two products for the year 2017 are as follows, Rs. Rs. Material A-2 Kg at Rs.200 per Kg 400 2.5 Kg at Rs.200 per Kg 500 Material B-1.5 Kg at Rs. 300 per Kg 450 2 Kg at Rs. 300 per Kg 600 Direct Labour-3 hours at Rs. 600 per hour 1800 2 hours at Rs. 600 per hour 1200 2) Production overhead is made up as follows; Rs. Electricity 10,000 Depreciation 20,000 Miscellaneous 120,000 150,000 Production overhead cost is absorbed into products using a direct labour hour absorption rate. 3) Sales The sales director has forecasted that sales of R and N will be 6,000 and 2,000 units, respectively, during the year 2017, The selling prices will be: R. Rs. 3,500 Rs. 3,900 4) Selling and distribution expense for the year amounts to Rs. 100,000 and it includes a depreciation of Rs. 20,000. 5) Corporate tax is charged at the rate of 30% per annum. 6) Inventory Finished good inventory to be as follows; Opening inventory (as at 1" January 2017) - Product R 1000 units Product N 300 units Closing inventory (as at 31" December 2017) Product R 1500 units Product N 500 units Raw material inventories Opening inventory- Material A 2,500 Kg Material B 2,000 Kg Closing inventory - Material A 2,000 Kg Material B 2,500 Kg 7) Budgeted cash flows for four quarters of 2017 is as follows; Quarter I Quarter 2 Quarter 3 Quarter 4 Rs. Rs. Rs. Rs. Receipts Sales revenue 6,000,000 6,000,000 7,000,000 9,000,000 Machine disposal 750,000 Payments Materials 1,510,000 2,500,500 1,900,000 1,400,000 Direct wages 3,585,000 3,585,000 3,585,000 3,585,000 Electricity 1,000 2,000 500 4,000 Other production overhead 15,000 25,000 30,000 50,000 Machine purchase 1,200,000 Selling and 20,000 20,000 20,000 20,000 distribution expenses ation 10,000 8) Book value of the machine disposed was Rs. 1,000,000 and it had an accumulated depreciation of Rs. 100,000. 10) Budgeted balance sheet as at 1" January 2017 is as follows Budgeted Balance sheet as at o1" January 2017 Cost Ace. Dep NBV Non-Current Assets Land 4,000,000 4,000,000 Building and Equipment 6.000.000 650.000 5,350,000 10,000,000 650,000 9,350,000 Current Assets Inventories Raw material 500,000 600.000 1,100,000 Finished goods 2,371,136 986.948 3,358,084 Receivables 9,500,000 13.958.084 Total Assets 23,308,084 Current Liabilities Payables 2,308,084 Accrued electricity 3,000 ation 10,000 Cash at bank 100.000 2,421,084 Noncurrent liability 15 year Bank loan 5,887,000 Equity Share Capital 13,000,000 Retained earnings 2,000,000 15,000,000 Total equity and Liability 23,308,084 h. Cash budget i. Budgeted Income statement and Balance Sheet (Te Live Lad produces two products namely as R and N. You are given following information. D Budgeted direct cost per unit for two products for the year 2017 are as follows, Rs. Rs. Material A-2 Kg at Rs.200 per Kg 400 2.5 Kg at Rs.200 per Kg 500 Material B-1.5 Kg at Rs. 300 per Kg 450 2 Kg at Rs. 300 per Kg 600 Direct Labour-3 hours at Rs. 600 per hour 1800 2 hours at Rs. 600 per hour 1200 2) Production overhead is made up as follows; Rs. Electricity 10,000 Depreciation 20,000 Miscellaneous 120,000 150,000 Production overhead cost is absorbed into products using a direct labour hour absorption rate. 3) Sales The sales director has forecasted that sales of R and N will be 6,000 and 2,000 units, respectively, during the year 2017, The selling prices will be: R. Rs. 3,500 Rs. 3,900 4) Selling and distribution expense for the year amounts to Rs. 100,000 and it includes a depreciation of Rs. 20,000. 5) Corporate tax is charged at the rate of 30% per annum. 6) Inventory Finished good inventory to be as follows; Opening inventory (as at 1" January 2017) - Product R 1000 units Product N 300 units Closing inventory (as at 31" December 2017) Product R 1500 units Product N 500 units Raw material inventories Opening inventory- Material A 2,500 Kg Material B 2,000 Kg Closing inventory - Material A 2,000 Kg Material B 2,500 Kg 7) Budgeted cash flows for four quarters of 2017 is as follows; Quarter I Quarter 2 Quarter 3 Quarter 4 Rs. Rs. Rs. Rs. Receipts Sales revenue 6,000,000 6,000,000 7,000,000 9,000,000 Machine disposal 750,000 Payments Materials 1,510,000 2,500,500 1,900,000 1,400,000 Direct wages 3,585,000 3,585,000 3,585,000 3,585,000 Electricity 1,000 2,000 500 4,000 Other production overhead 15,000 25,000 30,000 50,000 Machine purchase 1,200,000 Selling and 20,000 20,000 20,000 20,000 distribution expenses ation 10,000 8) Book value of the machine disposed was Rs. 1,000,000 and it had an accumulated depreciation of Rs. 100,000. 10) Budgeted balance sheet as at 1" January 2017 is as follows Budgeted Balance sheet as at o1" January 2017 Cost Ace. Dep NBV Non-Current Assets Land 4,000,000 4,000,000 Building and Equipment 6.000.000 650.000 5,350,000 10,000,000 650,000 9,350,000 Current Assets Inventories Raw material 500,000 600.000 1,100,000 Finished goods 2,371,136 986.948 3,358,084 Receivables 9,500,000 13.958.084 Total Assets 23,308,084 Current Liabilities Payables 2,308,084 Accrued electricity 3,000 ation 10,000 Cash at bank 100.000 2,421,084 Noncurrent liability 15 year Bank loan 5,887,000 Equity Share Capital 13,000,000 Retained earnings 2,000,000 15,000,000 Total equity and Liability 23,308,084 h. Cash budget i. Budgeted Income statement and Balance Sheet (Te