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The XYZ company produces three products, X, Y, and Z. For the coming accounting period
budgets are to be prepared using the following information:
Budgeted sales
Product X 2,000 units at $100 each
Product Y 4,000 units at $130 each
Product Z 3,000 units at $150 each
Standard usage of raw material
Wood
(kg per unit) Varnish
(litres per unit)
Product X 5 2
Product Y 3 2
Product Z 2 1
Standard cost of raw materialStandard cost of raw material $8 $4
Inventories of finished goods
X Y Z
Opening 500u 800u 700u
Closing 600u 1,000u 800u
Inventories of raw materials
Wood
(kg)
Varnish
(litres)
Opening 21,000 10,000
Closing 18,000 9,000
Labour
X Y Z
Standard hours per unit 4 6 8
Labour is paid at the rate of $3 per hourLabour is paid at the rate of $3 per hourLabour is paid at the rate of $3 per hourLabour is paid at the rate of $3 per hourLabour is paid at the rate of $3 per hour
Prepare the following budgets:
(a) Sales budget (quantity and value)
(b) Production budget (units)
(c) Material usage budget (quantities)
(d) Material purchases budget (quantities anThe XYZ company produces three products, X, Y, and Z. For the coming accounting period
budgets are to be prepared using the following information:
Budgeted sales
Product X 2,000 units at $100 each
Product Y 4,000 units at $130 each
Product Z 3,000 units at $150 each
Standard usage of raw material
Wood(kg per unit) Varnish (litres per unit)
Product X 5 2
Product Y 3 2
Product Z 2 1
Standard cost of raw materialStandard cost of raw material $8 $4
Inventories of finished goods X Y Z
Opening 500u 800u 700u
Closing 600u 1,000u 800u
Inventories of raw materials Wood(kg) Varnish(litres)
Opening 21,000 10,000
Closing 18,000 9,000
Labour X Y Z
Standard hours per unit 4 6 8
Labour is paid at the rate of $3 per hour.
Prepare the following budgets:
(a) Sales budget (quantity and value)
(b) Production budget (units)
(c) Material usage budget (quantities)
(d) Material purchases budget (quantities an
e Labour budget (hours and value)This example is from our free lecture notes and (as with all the examples in the notes) the answer is worked through in our free lectures.
There is no point in using the notes without watching the lectures – they are lecture notes and it is in the lectures that I work through the examples and explain and expand on the notes.
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