Budgeting Help

Charlottec5779

Hi All I am hoping that someone can point me in the right direction with regards to the attached practice question I have been able to work out all answers apart from the used in production & closing inventory values in pounds. Thanks in anticipation of your help Kind regards Charlotte Attachment not found.

kkelly

Hi Charlotte,
This is one of those questions that you can get bogged down on easily....but here you go!
Used in production is the 30,000 units produced * .55 kg of material = 16,500 kgs
Closing inventory is therfore 17,600 - 16500 = 1100 kgs
Closing inventory is valued at budgeted purchase price which is £ 27,125 / 15.500 kgs which is 1.75 per KG
so closing inventory = 1100 kgs * 1.75 = £1925
and the puchase figure is the balance £27,200
Regards
Kevin

Charlottec5779

Thanks so much Kevin - that's a great help

I cant believe how much I have been trying to over complicate that by doing all sorts of bizarre workings lol

Best wishes
Charlotte