Problem 3 The operating results of GOE Ltd, for the year ending 31 December 2011, are summarized below: $ Sales - 40,000 units 48.00 Less: Trade discount 2.40 Net sales 45.60 Cost of sales. Direct labour 14.40 Direct materials 12.60 6.30 Factory overheads Administration overheads Selling and distribution overheads 3.60 4.50 The following changes are to be incorporated in the budget for the year 2012: (a) Sales (units) to be increased by 25%; (b) Material price to increase by 15%; (c) Direct wages to go up by 12%; (d) Overheads-factory overheads will increase by 15%. In addition, a new facility will be added to the factory laboratory at a recurring cost of 12,500 per year. Administrative and selling and distribution overheads are estimated to increase by 10% and 14%, respectively; (e) Inventory-no change; (f) Profit target for the year has been fixed at 6 lakh; (g) No change in the rate of trade discount. Calculate the unit selling price and present the budget for 2012 in a meaningful format. Problem 3 The operating results of GOE Ltd, for the year ending 31 December 2011, are summarized below: $ Sales - 40,000 units 48.00 Less: Trade discount 2.40 Net sales 45.60 Cost of sales. Direct labour 14.40 Direct materials 12.60 6.30 Factory overheads Administration overheads Selling and distribution overheads 3.60 4.50 The following changes are to be incorporated in the budget for the year 2012: (a) Sales (units) to be increased by 25%; (b) Material price to increase by 15%; (c) Direct wages to go up by 12%; (d) Overheads-factory overheads will increase by 15%. In addition, a new facility will be added to the factory laboratory at a recurring cost of 12,500 per year. Administrative and selling and distribution overheads are estimated to increase by 10% and 14%, respectively; (e) Inventory-no change; (f) Profit target for the year has been fixed at 6 lakh; (g) No change in the rate of trade discount. Calculate the unit selling price and present the budget for 2012 in a meaningful format