Question 9 (30 Marks - 54 Minutes) Supp 2016 Urban-X Limited manufactures and sells t-shirts to students called Urban-X (UX) and Urban- Legend (UL). In September 2016, the management accountant in the budgeting department gathered the following data to prepare budgets for 2017: Projected sales for 2017 is estimated at 60 000 units of UX at a unit price of N$70 and 40 000 units of UL at a unit price of N$100. It is expected that inventories are: Product Expected: 1 Jan 2017 (units)_ 20 000 Desired: 31 Dec 2017 (units) 25 000 UX Page 44 of 72 UL. 180 8 000 9 000 In order to produce one unit of UX and UL, the following raw materials are used: Unit UX Raw material Rim Ram Lexe Kg Each Projected data for 2017 with respect to raw material are as follows: Raw material Anticipated purchase price Rim Ram Lexe N$8 per kg N$5 per kg NS3 per unit Expected inventories: 1 Jan 2017 32 000 kg 29 000 kg 6 000 units Targeted inventories: 31 Dec 2017 36 000 kg 32 000 kg 7 000 unit Projected direct-labour requirements and rates for 2017 are as follows Hours per unit Product UX UL Rate per hour N$3 NS4 Manufacturing overhead is allocated at the rate of N$2 per direct labour hour. MARKS REQUIRED: 9.1 Explain what a master budget is. 92 "Strategy plans and budgets are unrelated to one another." Do you agree? Explain. 9.3 Based on the projections above and the budget requirements for UX and UL, prepare the following budgets for 2017 9.3.1 Sales budgets (in Namibian Dollars) 9.3.2 Production budget (in units) 9.33 Raw material purchase budgets in quantities 9.34 Raw materials purchases budget in Namibian Dollars 93.5 Direct labour budget in Namibian Dollars 9.3.6 Total budgeted finish goods inventory as at 31 December 2017 in Namibian Dollars. TOTAL MARKS FOR QUESTION 9 Question 9 (30 Marks - 54 Minutes) Supp 2016 Urban-X Limited manufactures and sells t-shirts to students called Urban-X (UX) and Urban- Legend (UL). In September 2016, the management accountant in the budgeting department gathered the following data to prepare budgets for 2017: Projected sales for 2017 is estimated at 60 000 units of UX at a unit price of N$70 and 40 000 units of UL at a unit price of N$100. It is expected that inventories are: Product Expected: 1 Jan 2017 (units)_ 20 000 Desired: 31 Dec 2017 (units) 25 000 UX Page 44 of 72 UL. 180 8 000 9 000 In order to produce one unit of UX and UL, the following raw materials are used: Unit UX Raw material Rim Ram Lexe Kg Each Projected data for 2017 with respect to raw material are as follows: Raw material Anticipated purchase price Rim Ram Lexe N$8 per kg N$5 per kg NS3 per unit Expected inventories: 1 Jan 2017 32 000 kg 29 000 kg 6 000 units Targeted inventories: 31 Dec 2017 36 000 kg 32 000 kg 7 000 unit Projected direct-labour requirements and rates for 2017 are as follows Hours per unit Product UX UL Rate per hour N$3 NS4 Manufacturing overhead is allocated at the rate of N$2 per direct labour hour. MARKS REQUIRED: 9.1 Explain what a master budget is. 92 "Strategy plans and budgets are unrelated to one another." Do you agree? Explain. 9.3 Based on the projections above and the budget requirements for UX and UL, prepare the following budgets for 2017 9.3.1 Sales budgets (in Namibian Dollars) 9.3.2 Production budget (in units) 9.33 Raw material purchase budgets in quantities 9.34 Raw materials purchases budget in Namibian Dollars 93.5 Direct labour budget in Namibian Dollars 9.3.6 Total budgeted finish goods inventory as at 31 December 2017 in Namibian Dollars. TOTAL MARKS FOR QUESTION 9