XY Ltd sells 2 products which are manufactured in one plant.

During the year 2009, it planned to sell the following quantities of each product Q1 Q2 Q3 Q4

X(Units) 90,000 230,000 300,000 80,000

Y(Units) 65,000 75,000 55,000 85,000

Product X sells at Ksh 10 per unit while Y at Ksh20 per unit. A study of past experience reveals that XY limited loses 3% of its billed revenue each year due to bad debts.

REQUIRED: Prepare sales budget incorporating the given information (8MKS)

b.Discuss the Differences between Cost accounting and financial accounting (12mks)

QUESTION 2(20MKS)

a) Discuss the duties of budget committee in budget and budgetary control(10mks)

B) The following data have been extracted from the budgets and standard costs of Mambo Yote Limited, a company which manufactures and sells single product.

	Sh. per unit
Selling price Direct materials cost Direct wages cost Variable overhead costs	45.00 10.00 4.00 2.50

Fixed production overhead costs are budgeted at Sh.400, 000 per annum. Normal production levels are thought to be 320,000 units per annum.

Budgeted selling and distribution costs are as follows:

VariableSh.1.50 per unit sold

FixedSh.80, 000 per annum

Budgeted administration costs are Sh.120, 000 per annum (fixed).

The following patterns of sales and production are expected during the first six months of 2014.

	January March	April June
Sales (units) Production (units)	60,000 70,000	90,000 100,000

There is no stock on 1 January 2014.

Required:

Prepare profit statements for each of the two quarters, in a columnar format, using the following:

a) Marginal costing(5Marks)

b) Absorption costing (5mks)