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ACC 2613_Management Accounting 1_George Ltd_Budgets




Question;ACC 2613Management Accounting 1Semester 1, 2014AssignmentGeorge Ltd manufactures two types of coils used in electric motors. The two types are: C20 and D40. They both require plastic and metal. Information for the two products for the month of April is given in the following tables:Input pricesDirect materials Plastic$4 per kilogram Metal$3 per kilogramDirect manufacturing labour$10 per direct manufacturing labour hourInput quantities per unit of outputC20D40Direct materials Plastic4 kilograms6 kilograms Metal0.5 kilogram1 kilogramDirect manufacturing labour-hours (DMLH)3 hours5 hoursMachine-hours (MH)10 MH18MHInventory information, direct materialsPlasticMetalBeginning inventory250 kilograms60 kilogramsTarget ending inventory380 kilograms55 kilogramsCost of beginning inventory$950$180The company accounts for direct materials using a FIFO cost flow assumption.Sales and inventory information, finished goodsC20D40Expected sales in units500300Selling price$160$250Target ending inventory in units3515Beginning inventory in units1530Beginning inventory in dollars$1500$5580The company uses:? a FIFO cost flow assumption for finished goods inventory.? an activity-based costing system and classifies overhead into three activity pools: Set-up, Processing and Inspection. Activity rates for these activities are $100 per set-up hour. $5 per machine-hour and $16 per inspection-hour, respectively.Other information is as follows:Cost driver informationC20D40Number of units per batch2015Set-up time per batch1.5 hours1.75 hoursInspection time per batch0.5 hour0.6 hourNon-manufacturing fixed costs for March equal $36,000 of which half are salaries. Salaries are expected to increase by 5% in April. The only variable non-manufacturing cost is sales commission equal to 1% of sales revenue.Required:Prepare the following for April:a. Sales budgetb. Production budget in unitsc. Direct material usage budget and direct material purchases budgetd. Manufacturing overhead cost budgets for each of the three activitiese. Budgeted income statement (ignore income taxes)


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