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Clockwork clown wind up training
Direct material ( $5kg) 2kg 1kg
Direct labour ( $ 8per hour) 18mins 30mins
Budged sales 450 550Budgeted Inventory:
Finished goods: opening inventory 20 50
closing inventory 30 40
Raw Material: opening inventory 50kg
closing inventory 60kg
calculate material usage budget, material purchase, direct labour budget.
material usage i got 1480kg.correct ans. 1460kg, labour budget i got 3280kg, correct ans.3264. what am i doing wrong? please helpYou have not said how you arrived at your answers, so it is impossible for me to know what you are doing wrong!
First you need to calculate the production in units, which is sales minus opening inventory plus closing inventory.
Then you can calculate the materials usage, which is production multiplied by the kgs (for each product, then totalled).
Then you can calculate the materials purchases, which is materials usage minus opening inventory plus closing inventory.
You can also calculate labour, by multiplying production units by labour hours.
Production budget= production in units 450 550
Less opening inventory 20 50
Add closing inventory 30 40
——— ————
460 540material usuage= 460 * 2 *5 4600 2700 (540*1*5)
Material Purchase= 4600 2700
50
Add closing 60
—— ———-
4610 2700= 7310 my answer/ correct ans 7350
How did they arrive at that answer?????labour bugget: 460*18/60*8 1104 2160 (30/60*540*8)
= 3264
You have added and subtracted the closing and opening inventory in kg, when you have your production in $’s.
The production budget should be in kgs, not $’s. Then you can adjust for the opening and closing inventory in kgs to get the purchases in kgs, and then you can calculate in $’s.
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