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Millie manufactures exclusive office equipment and is attempting to prepare budgets for the next couple of months being April and May.The following information is relevant:

          Opening stock                 Budgeted sales                Selling price

                In units                           in units                          per unit

                                                April             May                       £

Chairs          63                         290             410                       120

Desks          36                         120             100                       208

Stools          90                         230             120                         51

Millie requires her closing stock to be 30% of that month’s sales All three products are made using wood, plastic, unskilled and skilled labour.The quantities per unit are as follows:

                   Wood           Plastic          Unskilled labour     Skilled labour

                    cu ft             cu ft                hours                   hours

Chairs             4                  2                       3                          2

Desks             5                  3                       5                          8

Stools             2                  1                       2                         0

Cost/unit     £12/ft          £7/ft                 £7.25/hr                £12/hr

Millie’s opening stocks of raw materials are 142 cubic feet of wood and 81 cubic feet of plastic.  However she intends to increase this during April so that she always has sufficient raw materials to product 50 units of each item by the end of May.Production overheads amount to £7,174.00 which are recovered based on total direct labour hours for production.

Required: 

Prepare the following budgets for April and May to include:

The sales budget

The production budget

The material usage budget

The material purchases budget

The labour utilisation budget

The predicted profit statement

These budgets and profit statement need to be completed in excel and are required in order to answer part 2 of the TCA.                                   

SALES BUDGET:      
         
Particulars Chairs Desks Stools TOTAL
         
April:        
Selling Price per Unit £120 £208 £51  
Sales Volume in April 290 120 230  
Total Sales in April £34,800 £24,960 £11,730 £71,490
         
May:        
Selling Price per Unit £120 £208 £51  
Sales Volume in May 410 100 120  
Total Sales in May £49,200 £20,800 £6,120 £76,120
         
TOTAL SALES £84,000 £45,760 £17,850 £1,47,610
         
         
PRODUCTION BUDGET:    
         
Particulars Chairs Desks Stools  
         
April:        
Total Sales in April 290 120 230  
Add: Closing Stock 87 36 69  
Less: Opening Stock 63 36 90  
Total Production in April 314 120 209  
         
May:        
Total Sales in May 410 100 120  
Add: Closing Stock 123 30 36  
Less: Opening Stock 87 36 69  
Total Production in May 446 94 87  
         
TOTAL PRODUCTION 760 214 296  
         
MATERIAL USAGE BUDGET:    
  April May
Particulars Wood Plastic Wood Plastic
         
Chair:        
Total Production 314 314 446 446
Usage per unit (cu ft.) 4 2 4 2
Total Usage for Chairs (cu ft.) 1256 628 1784 892
         
         
Desks:        
Total Production 120 120 94 94
Usage per unit (cu ft.) 5 3 5 3
Total Usage for Desks (cu ft.) 600 360 470 282
         
         
Stools:        
Total Production 209 209 87 87
Usage per unit (cu ft.) 2 1 2 1
Total Usage for Stools (cu ft.) 418 209 174 87
         
TOTAL MATERIAL USAGE 2274 1197 2428 1261
         
MATERIAL PURCHASE BUDGET:  
         
Particulars Woods Plastic TOTAL  
         
April:        
Total Usage on April  2274 1197    
Add: Closing Stock 550 300    
Less: Opening Stock 142 81    
Purchase Volume in April (cu ft.) 2682 1416    
Material Cost per ft. £12 £7    
Total Purchase in April £32,184 £9,912 £42,096  
         
May:        
Total Sales in May 2428 1261    
Add: Closing Stock 550 300    
Less: Opening Stock 550 300    
Purchase Volume in May (cu ft.) 2428 1261    
Material Cost per ft. £12 £7    
Total Purchase in May £29,136 £8,827 £37,963  
         
TOTAL MATERIAL PURCHASE £61,320 £18,739 £80,059  
         
LABOUR UTILISATION BUDGET:  
  April May
Particulars Unskilled Labour Hour Skilled Labour Hours Unskilled Labour Hour Skilled Labour Hour
         
Chair:        
Total Production 314 314 446 446
Labour Hour required per unit 3 2 3 2
Total Labour Hr for Chairs  942 628 1338 892
         
         
Desks:        
Total Production 120 120 94 94
Labour Hour required per unit 5 8 5 8
Total Labour Hr for Desks  600 960 470 752
         
         
Stools:        
Total Production 209 209 87 87
Labour Hour required per unit 2 0 2 0
Total Labour Hr for Stools  418 0 174 0
         
TOTAL LABOUR HOURS 1960 1588 1982 1644
Rate per Laour Hour £7.25 £12 £7.25 £12
         
TOTAL LABOUR UTILISATION £14,210 £19,056 £14,370 £19,728
         
BUDGETED PROFIT STATEMENT:  
         
Particulars April May TOTAL  
         
Total Sales £71,490 £76,120 £1,47,610  
Cost of Material Consumed:        
Woods -£27,288 -£29,136 -£56,424  
Plastic -£8,379 -£8,827 -£17,206  
Labor Cost:        
Unskilled Labours -£14,210 -£14,370 -£28,580  
Skilled Labours -£19,056 -£19,728 -£38,784  
Production Overhead -£3,548 -£3,626 -£7,174  
         
BUDGETED PROFIT -£991 £434 -£558  
         
SALES BUDGET:      
         
Particulars Chairs Desks Stools TOTAL
         
April:        
Selling Price per Unit £144 £208 £51  
Sales Volume in April 290 120 230  
Total Sales in April £41,760 £24,960 £11,730 £78,450
         
May:        
Selling Price per Unit £144 £208 £51  
Sales Volume in May 410 100 120  
Total Sales in May £59,040 £20,800 £6,120 £85,960
         
TOTAL SALES £1,00,800 £45,760 £17,850 £1,64,410
         
         
PRODUCTION BUDGET:    
         
Particulars Chairs Desks Stools  
         
April:        
Total Sales in April 290 120 230  
Add: Closing Stock 87 36 69  
Less: Opening Stock 63 36 90  
Total Production in April 314 120 209  
         
May:        
Total Sales in May 410 100 120  
Add: Closing Stock 123 30 36  
Less: Opening Stock 87 36 69  
Total Production in May 446 94 87  
         
TOTAL PRODUCTION 760 214 296  
         
MATERIAL USAGE BUDGET:    
  April May
Particulars Wood Plastic Wood Plastic
         
Chair:        
Total Production 314 314 446 446
Usage per unit (cu ft.) 4 2 4 2
Total Usage for Chairs (cu ft.) 1256 628 1784 892
         
         
Desks:        
Total Production 120 120 94 94
Usage per unit (cu ft.) 5 3 5 3
Total Usage for Desks (cu ft.) 600 360 470 282
         
         
Stools:        
Total Production 209 209 87 87
Usage per unit (cu ft.) 2 1 2 1
Total Usage for Stools (cu ft.) 418 209 174 87
         
TOTAL MATERIAL USAGE 2274 1197 2428 1261
         
MATERIAL PURCHASE BUDGET:  
         
Particulars Woods Plastic TOTAL  
         
April:        
Total Usage on April  2274 1197    
Add: Closing Stock 550 300    
Less: Opening Stock 142 81    
Purchase Volume in April (cu ft.) 2682 1416    
Material Cost per ft. £12 £7    
Total Purchase in April £32,184 £9,912 £42,096  
         
May:        
Total Sales in May 2428 1261    
Add: Closing Stock 550 300    
Less: Opening Stock 550 300    
Purchase Volume in May (cu ft.) 2428 1261    
Material Cost per ft. £12 £7    
Total Purchase in May £29,136 £8,827 £37,963  
         
TOTAL MATERIAL PURCHASE £61,320 £18,739 £80,059  
         
LABOUR UTILISATION BUDGET:  
  April May
Particulars Unskilled Labour Hour Skilled Labour Hours Unskilled Labour Hour Skilled Labour Hour
         
Chair:        
Total Production 314 314 446 446
Labour Hour required per unit 3 2 3 2
Total Labour Hr for Chairs  942 628 1338 892
         
         
Desks:        
Total Production 120 120 94 94
Labour Hour required per unit 5 8 5 8
Total Labour Hr for Desks  600 960 470 752
         
         
Stools:        
Total Production 209 209 87 87
Labour Hour required per unit 2 0 2 0
Total Labour Hr for Stools  418 0 174 0
         
TOTAL LABOUR HOURS 1960 1588 1982 1644
Rate per Laour Hour £7.25 £12 £7.25 £12
         
TOTAL LABOUR UTILISATION £14,210 £19,056 £14,370 £19,728
         
BUDGETED PROFIT STATEMENT:  
         
Particulars April May TOTAL  
         
Total Sales £78,450 £85,960 £1,64,410  
Cost of Material Consumed:        
Woods -£27,288 -£29,136 -£56,424  
Plastic -£8,379 -£8,827 -£17,206  
Labor Cost:        
Unskilled Labours -£14,210 -£14,370 -£28,580  
Skilled Labours -£19,056 -£19,728 -£38,784  
Production Overhead -£3,548 -£3,626 -£7,174  
         
BUDGETED PROFIT £5,969 £10,274 £16,243  
         
SALES BUDGET:      
         
Particulars Chairs Desks Stools TOTAL
         
April:        
Selling Price per Unit £120 £208 £51  
Sales Volume in April 290 120 230  
Total Sales in April £34,800 £24,960 £11,730 £71,490
         
May:        
Selling Price per Unit £120 £208 £51  
Sales Volume in May 410 100 150  
Total Sales in May £49,200 £20,800 £7,650 £77,650
         
TOTAL SALES £84,000 £45,760 £19,380 £1,49,140
         
         
PRODUCTION BUDGET:    
         
Particulars Chairs Desks Stools  
         
April:        
Total Sales in April 290 120 230  
Add: Closing Stock 87 36 69  
Less: Opening Stock 63 36 90  
Total Production in April 314 120 209  
         
May:        
Total Sales in May 410 100 150  
Add: Closing Stock 123 30 45  
Less: Opening Stock 87 36 69  
Total Production in May 446 94 126  
         
TOTAL PRODUCTION 760 214 335  
         
MATERIAL USAGE BUDGET:    
  April May
Particulars Wood Plastic Wood Plastic
         
Chair:        
Total Production 314 314 446 446
Usage per unit (cu ft.) 4 2 4 2
Total Usage for Chairs (cu ft.) 1256 628 1784 892
         
         
Desks:        
Total Production 120 120 94 94
Usage per unit (cu ft.) 5 3 5 3
Total Usage for Desks (cu ft.) 600 360 470 282
         
         
Stools:        
Total Production 209 209 126 126
Usage per unit (cu ft.) 2 1 2 1
Total Usage for Stools (cu ft.) 418 209 252 126
         
TOTAL MATERIAL USAGE 2274 1197 2506 1300
      78 39
MATERIAL PURCHASE BUDGET: 4780 2497
         
Particulars Woods Plastic TOTAL  
         
April:        
Total Usage on April  2274 1197    
Add: Closing Stock 550 300    
Less: Opening Stock 142 81    
Purchase Volume in April (cu ft.) 2682 1416    
Material Cost per ft. £12 £7    
Total Purchase in April £32,184 £9,912 £42,096  
         
May:        
Total Sales in May 2506 1300    
Add: Closing Stock 550 300    
Less: Opening Stock 550 300    
Purchase Volume in May (cu ft.) 2506 1300    
Material Cost per ft. £12 £7    
Total Purchase in May £30,072 £9,100 £39,172  
         
TOTAL MATERIAL PURCHASE £62,256 £19,012 £81,268  
  £936 £273    
LABOUR UTILISATION BUDGET:  
  April May
Particulars Unskilled Labour Hour Skilled Labour Hours Unskilled Labour Hour Skilled Labour Hour
         
Chair:        
Total Production 314 314 446 446
Labour Hour required per unit 3 2 3 2
Total Labour Hr for Chairs  942 628 1338 892
         
         
Desks:        
Total Production 120 120 94 94
Labour Hour required per unit 5 8 5 8
Total Labour Hr for Desks  600 960 470 752
         
         
Stools:        
Total Production 209 209 126 126
Labour Hour required per unit 2 0 2 0
Total Labour Hr for Stools  418 0 252 0
         
TOTAL LABOUR HOURS 1960 1588 2060 1644
Rate per Laour Hour £7.25 £12 £7.25 £12
         
TOTAL LABOUR UTILISATION £14,210 £19,056 £14,935 £19,728
         
BUDGETED PROFIT STATEMENT:  
         
Particulars April May TOTAL  
         
Total Sales £71,490 £77,650 £1,49,140  
Cost of Material Consumed:        
Woods -£27,288 -£30,072 -£57,360  
Plastic -£8,379 -£9,100 -£17,479  
Labor Cost:        
Unskilled Labours -£14,210 -£14,935 -£29,145  
Skilled Labours -£19,056 -£19,728 -£38,784  
Production Overhead -£3,510 -£3,664 -£7,174  
         
BUDGETED PROFIT -£953 £151 -£802  
         
SALES BUDGET:      
         
Particulars Chairs Desks Stools TOTAL
         
April:        
Selling Price per Unit £120 £208 £51  
Sales Volume in April 290 120 230  
Total Sales in April £34,800 £24,960 £11,730 £71,490
         
May:        
Selling Price per Unit £120 £208 £51  
Sales Volume in May 410 100 120  
Total Sales in May £49,200 £20,800 £6,120 £76,120
         
TOTAL SALES £84,000 £45,760 £17,850 £1,47,610
         
         
PRODUCTION BUDGET:    
         
Particulars Chairs Desks Stools  
         
April:        
Total Sales in April 290 120 230  
Add: Closing Stock 58 24 46  
Less: Opening Stock 63 36 90  
Total Production in April 285 108 186  
         
May:        
Total Sales in May 410 100 120  
Add: Closing Stock 82 20 24  
Less: Opening Stock 58 24 46  
Total Production in May 434 96 98  
         
TOTAL PRODUCTION 719 204 284  
         
MATERIAL USAGE BUDGET:    
  April May
Particulars Wood Plastic Wood Plastic
         
Chair:        
Total Production 285 285 434 434
Usage per unit (cu ft.) 4 2 4 2
Total Usage for Chairs (cu ft.) 1140 570 1736 868
         
         
Desks:        
Total Production 108 108 96 96
Usage per unit (cu ft.) 5 3 5 3
Total Usage for Desks (cu ft.) 540 324 480 288
         
         
Stools:        
Total Production 186 186 98 98
Usage per unit (cu ft.) 2 1 2 1
Total Usage for Stools (cu ft.) 372 186 196 98
         
TOTAL MATERIAL USAGE 2052 1080 2412 1254
         
MATERIAL PURCHASE BUDGET:  
         
Particulars Woods Plastic TOTAL  
         
April:        
Total Usage on April  2052 1080    
Add: Closing Stock 550 300    
Less: Opening Stock 142 81    
Purchase Volume in April (cu ft.) 2460 1299    
Material Cost per ft. £12 £7    
Total Purchase in April £29,520 £9,093 £38,613  
         
May:        
Total Sales in May 2412 1254    
Add: Closing Stock 550 300    
Less: Opening Stock 550 300    
Purchase Volume in May (cu ft.) 2412 1254    
Material Cost per ft. £12 £7    
Total Purchase in May £28,944 £8,778 £37,722  
         
TOTAL MATERIAL PURCHASE £58,464 £17,871 £76,335  
  £2,856 £868    
LABOUR UTILISATION BUDGET:  
  April May
Particulars Unskilled Labour Hour Skilled Labour Hours Unskilled Labour Hour Skilled Labour Hour
         
Chair:        
Total Production 285 285 434 434
Labour Hour required per unit 3 2 3 2
Total Labour Hr for Chairs  855 570 1302 868
         
         
Desks:        
Total Production 120 120 96 96
Labour Hour required per unit 5 8 5 8
Total Labour Hr for Desks  600 960 480 768
         
         
Stools:        
Total Production 186 186 98 98
Labour Hour required per unit 2 0 2 0
Total Labour Hr for Stools  372 0 196 0
         
TOTAL LABOUR HOURS 1827 1530 1978 1636
Rate per Laour Hour £7.25 £12 £7.25 £12
         
TOTAL LABOUR UTILISATION £13,246 £18,360 £14,341 £19,632
         
BUDGETED PROFIT STATEMENT:  
         
Particulars April May TOTAL  
         
Total Sales £71,490 £76,120 £1,47,610  
Cost of Material Consumed:        
Woods -£24,624 -£28,944 -£53,568  
Plastic -£7,560 -£8,778 -£16,338  
Labor Cost:        
Unskilled Labours -£13,246 -£14,341 -£27,586  
Skilled Labours -£18,360 -£19,632 -£37,992  
Production Overhead -£3,455 -£3,719 -£7,174  
         
BUDGETED PROFIT £4,245 £706 £4,952  
         
SALES BUDGET:      
         
Particulars Chairs Desks Stools TOTAL
         
April:        
Selling Price per Unit £120 £208 £51  
Sales Volume in April 290 120 230  
Total Sales in April £34,800 £24,960 £11,730 £71,490
         
May:        
Selling Price per Unit £120 £208 £51  
Sales Volume in May 410 100 120  
Total Sales in May £49,200 £20,800 £6,120 £76,120
         
TOTAL SALES £84,000 £45,760 £17,850 £1,47,610
         
         
PRODUCTION BUDGET:    
         
Particulars Chairs Desks Stools  
         
April:        
Total Sales in April 290 120 230  
Add: Closing Stock 87 36 69  
Less: Opening Stock 63 36 90  
Total Production in April 314 120 209  
         
May:        
Total Sales in May 410 100 120  
Add: Closing Stock 123 30 36  
Less: Opening Stock 87 36 69  
Total Production in May 446 94 87  
         
TOTAL PRODUCTION 760 214 296  
         
MATERIAL USAGE BUDGET:    
  April May
Particulars Wood Plastic Wood Plastic
         
Chair:        
Total Production 314 314 446 446
Usage per unit (cu ft.) 5 2 5 2
Total Usage for Chairs (cu ft.) 1570 628 2230 892
         
         
Desks:        
Total Production 120 120 94 94
Usage per unit (cu ft.) 5 2 5 2
Total Usage for Desks (cu ft.) 600 240 470 188
         
         
Stools:        
Total Production 209 209 87 87
Usage per unit (cu ft.) 2 1 2 1
Total Usage for Stools (cu ft.) 418 209 174 87
         
TOTAL MATERIAL USAGE 2588 1077 2874 1167
         
MATERIAL PURCHASE BUDGET:  
         
Particulars Woods Plastic TOTAL  
         
April:        
Total Usage on April  2588 1077    
Add: Closing Stock 550 300    
Less: Opening Stock 142 81    
Purchase Volume in April (cu ft.) 2996 1296    
Material Cost per ft. £12 £7    
Total Purchase in April £35,952 £9,072 £45,024  
         
May:        
Total Sales in May 2874 1167    
Add: Closing Stock 550 300    
Less: Opening Stock 550 300    
Purchase Volume in May (cu ft.) 2874 1167    
Material Cost per ft. £12 £7    
Total Purchase in May £34,488 £8,169 £42,657  
         
TOTAL MATERIAL PURCHASE £70,440 £17,241 £87,681  
         
LABOUR UTILISATION BUDGET:  
  April May
Particulars Unskilled Labour Hour Skilled Labour Hours Unskilled Labour Hour Skilled Labour Hour
         
Chair:        
Total Production 314 314 446 446
Labour Hour required per unit 3 2 3 2
Total Labour Hr for Chairs  942 628 1338 892
         
         
Desks:        
Total Production 120 120 94 94
Labour Hour required per unit 5 8 5 8
Total Labour Hr for Desks  600 960 470 752
         
         
Stools:        
Total Production 209 209 87 87
Labour Hour required per unit 2 0 2 0
Total Labour Hr for Stools  418 0 174 0
         
TOTAL LABOUR HOURS 1960 1588 1982 1644
Rate per Laour Hour £7.25 £12 £7.25 £12
         
TOTAL LABOUR UTILISATION £14,210 £19,056 £14,370 £19,728
         
BUDGETED PROFIT STATEMENT:  
         
Particulars April May TOTAL  
         
Total Sales £71,490 £76,120 £1,47,610  
Cost of Material Consumed:        
Woods -£31,056 -£34,488 -£65,544 £9,120
Plastic -£7,539 -£8,169 -£15,708 £1,498
Labor Cost:       £81,252
Unskilled Labours -£14,210 -£14,370 -£28,580  
Skilled Labours -£19,056 -£19,728 -£38,784  
Production Overhead -£3,548 -£3,626 -£7,174  
         
BUDGETED PROFIT -£3,919 -£4,261 -£8,180  
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