Budgeting Level 4 Practice Assessment 1, Task 3(b)

dalmatian

I'm stuck at this point of the Operating Budget:
Closing inventory of finished goods (In the assessment performance feedback it says that this is valued at budgeted production cost per unit) but how do I find this value??? The answer is 8825 but I cannot work out how it is calculated, can anybody help?

dalmatian

Sorry this is from the Osbourne Book "Preparing and Using Budgets"

BlueJeans

Hi d.

1000 from closing inventory of finished goods * 8.825 =8825

8.825 will come from total of raw materials+direct Labour+production overheads divide 28000 which is production....
So...140000+51100+56000=247100/28000=8.825*1000=8825

Hope this helps

dalmatian

Yes, it does. Many thanks!