Question 4

A company manufactures two products, SAMS and JAMS. Budgeted sales for next year are : Product SAMS 2400 units at Ghc 45 per unit Product JAMS 450units at Ghc 60 per unit.

Standard cost data for the products for next year are as follows;

Product SAMS per Unit Product JAMS per Unit

Direct Materials

U at GH 2 per Kg 24kg 30kg

V at GH 5 per Kg 10kg 8kg

W at GH 6 per Kg 5kg 10kg

Direct Wages

Unskilled at GH5 per hour 10 hours 5 hours

Skilled at GH 10 per hour 6 hours 5 hours

Budgeted stocks for next year are as follows:

SAMS (Units) JAMS (Units)

01-Jan 400 800

31-Dec 500 1100

Material U Material V Material W

01-Jan 30000 25000 12000

31-Dec 35000 27000 12500

Prepare the following budgets for next year;

a. Sales budget in cash

b. Production budget, in units

c. Material usage budget, in kg and in cash

d. Direct labour budget, in hours and in cash