PROFIT PLANNING QUESTION.

Q) The Apex Corporation manufactures and sells two products, Small and

Tiny . In July 2015, Apex's Budget Department gathered the following data in order to prepare

budgets for 2016:

Projected Sales - 2016

Units Price(Rs )

Small 65000 270

Tiny 40000 280

Opening and Closing Stock of Finished Goods

Opening Stock of Finished Goods

January 1, 2016

Closing Stock of Finished Goods

December 31, 2016

Small 20000 25000

Tiny 8000 9000

Projected per unit requirement of material for Small and Tiny for 2016:

Direct material Small (Kg) Tiny (Kg)

A 4 5

B 3 4

C 2 3

Projected data for 2016 with respect to direct materials are as follows:

Direct material Purchase

Price

Opening Inventories

January 1, 2016

Closing Inventories

December 31, 2016

A Rs.11 31,000 kg 36,000 kg

B Rs.5 29,000 kg 33,000 kg

C Rs.3 6,000 kg 8,000 kg

Projected direct manufacturing labor requirements and rates for 2016 are as follows:

Product Hours per Unit Rate per Hour

Small 2 Rs.16

Tiny 3 Rs.19

Manufacturing overhead is allocated at the rate of Rs.30 per direct manufacturing labour-hour.

So,

Prepare the following budgets:

(1)Revenue budget( in Rs.)

(2)Production budget (in units)

(3)Direct materials purchases consumption budget (in quantities);

(3A)Direct materials purchases budget (in quantities);

(4)Direct materials purchases budget (in Rs.)

(5)Direct manufacturing labour budget (in Hrs)

(5A)Direct manufacturing labour budget (in Rs.);

(6)Overhead Budget (in Rs)

(7)Budgeted finished goods inventory at December 31, 2016 (in Rs.)

(8) Profit plan- income and expenditure statement. (Rs)