Question
Please, put all the calculation and correct solution. I need to know where you find all the number. Assessment requirements: ABC Manufacturing Limited makes one
Please, put all the calculation and correct solution. I need to know where you find all the number.
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 per DL Hour
(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:
Fixed Assets | 1,260,000 | |||
Current Assets | ||||
Inventory | 145,000 | |||
Receivables | 240,000 | |||
Cash | 32,000 | |||
417,000 | ||||
Current Liabilities | ||||
Payables | 105,400 | |||
Other ST Liabilities | 28,000 | |||
133,400 | ||||
Net Current Assets | 283,600 | |||
Net Assets | 1,543,600 | |||
Equity | ||||
Share Capital | 750,000 | |||
Retained Earnings | 793,600 | |||
1,543,600 | ||||
Required
- As the Management Accountant in ABC Manufacturing Limited you have been asked by management to prepare a Budgeted P&L Account, Budgeted Balance Sheet and Cash Budget for the year ended 31/12/21 and present it to the Board for approval at the forthcoming Board Meeting. Comment on the budgeted profit/loss for the year and the main changes in the Budgeted Balance Sheet. Discuss whether the company will need to use the overdraft facility. If this is required, could the company take action to avoid this.
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