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1.

Production Budget

Sales (Units)
Add desired closing inventory (0.20 x next month's sales)
Total finished goods requirement
Less opening inventory
Required production (units)

2. Manufacturing Cost Budget

Required production (units)


Direct material cost (5kgs x Rs 3 per kg)
Total direct material cost
Total direct labour cost (Rs 5 per unit)
Total variable overhead cost (Rs 9 per unit)
Total variable manufacturing costs
All fixed manufacturing overheads (Rs 7,20,000 / 12 months)
Total manufacuring cost

3. Purchase Budget (Raw Materials)

Production requirement (units)


Raw material required for production @ 5 kgs per unit (kgs)
Add desired closing inventory (0.20 x May requirements)
Total requirements
Less opening inventory
Purchase requirement
Purchase requirement (amount @ Rs 3 per kg)

4. Selling and Administrative Expenses Budget

Unit sales
Variable Cost @ Rs 5 per unit
Fixed costs
Total selling and administrative expenses

5. Cost of Goods Sold Budget

Units sold
Cost per unit
Variable Rs 29
Fixed (Rs 60000 / 10000 units) Rs 6
Total cost

6. Budgeted Income Statement for the Month of April

Gross sales (9000 x Rs 50)


Less cash discount (Rs 450000 x 0.6 x 0.5 x 0.02)
Net Sales
Less cost of goods sold
Gross Margin (unadjusted)
Less capacity variance unfavourable (400 units x Rs 6)
Gross Margin (adjusted)
Less selling and administrative expenses
Earnings before taxes
Less taxes (0.35)
Earning after taxes

7. Budgeted Statement of Retained Earnings

Opening Balance
Add earnings after taxes
Closing balance

8. Cash Budget (April)


Opening balance
Cash Inflows:
Collection from debtors:
March sales
April sales (gross) (Rs450000 x 0.60) 270000
Less cash discount 2700
(Rs 270000 x 0.5 x 0.02)
Cash Outflows:
Payment to creditors:
For March purchases
For April purchases (Rs 153600 x 2/3)
Direct Labour
Variable manufacturing overhead
Fixed manufacturing overhead
Less depreciation
Variable selling and administrative overheads
Fixed selling and administrative overheads
Taxes
Closing balance

9. Proforma Balance Sheet as at March 31, Next Year


Liabilities Amount
Accounts payable (Rs 40000 + Rs 153600 - Rs 142400) 51200
Taxes payable (Rs 25000 + Rs 22715 - Rs 25000) 22715
Share capital 1100000
Retained earnings 1068985

2242900
BUDGETING
MANAGEMENT ACCOUNTING -2
GROUP - 9
April May Amartya Das M17-05
9000 12000 Aniket Kuarane M17-06
2400 3200 Avinash Kaushal M17-09
11400 15200 Biswa Mohan Pati M17-11
-1800 -2400 Ujjwal Rao M17-34
9600 12800

April
9600
x Rs 15
144000
48000
86400
278400
60000
338400

April May
9600 12800
48000 64000
12800
60800
-9600
51200
153600

April
9000
45000
20000
65000

April
9000

x Rs 35
315000

April
450000
2700
447300
315000
132300
2400
129900
65000
64900
22715
42185

April
1026800
42185
1068985

300000

250000

267300 517300 817300

40000
102400 142400
48000
86400
60000
-20000 40000
45000
20000
25000 406800
410500
Assets Amount
Cash 410500
Accounts receivable (Rs 450000 x 0.40) 180000
Inventories:
Raw material (Rs 3 x 12800) 38400
Finished goods (Rs 35 x 2400) 84000 122400
Fixed assets:
Cost 2000000
Less accumulated depreciation 470000 1530000
2242900
)

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