have i got this right?

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:10AM in AAT student discussion
could someone out there check ive done this right, it would be most appreciated!!<BR><BR>Question<BR>You are employed as a management accountant in the head office of Alton Products plc, One of your tasks involves helping to prepare quaterly budgets for the divisional companies of Alton Products. Each quarter consists of 12 five day weeks for both production and sales purposes.<BR><BR>One division, Safety Care, makes two chemicals Delta and Omega. These are sold in standard boxes. Both products use the same material and labour in different proportions. You have been provided with the following information relating to the two products for quarter 3, the 12 weeks ending 29th September 2000.<BR><BR>Data<BR>Budgeted Sales Delta Omega<BR>Quarter 3:12 weeks to 29 September 2000 3,000 boxes 2,400 boxes<BR>Quarter 4:12 weeks to 22 December 2000 3,300 boxes 2,640 boxes<BR>Finished stocks for quarter 3 Delta Omega<BR>Opening Stock 630 boxes 502 boxes<BR>Closing Stock (days sales in quarter 4) 6 days 8 days<BR>Production inputs Delta Omega<BR>Material per box 12 kilograms 15 kilograms<BR>Labour per box 3 hours 6 hours<BR><BR>Material stocks and costs for quarter 3<BR>Opening stock (kilograms) 13,560<BR>Closing stock (kilograms) 21,340<BR>Budgeted purchase price per kilogram £7.00<BR>Labour costs for quarter 3<BR>52 production employees work a 36-hour week and are each paid £180 per week.<BR>Any overtime is payable at £7.50 per hour.<BR>Faulty production<BR>10% of production is found to be faulty on completion. Faulty production has to be scrapped and has no scrap value.<BR><BR>Task 1.1<BR>The production director of safety care asks you to prepare the following for quarter 3:<BR><BR>a) the number of boxes of DELTA AND OMEGA planned to be in closing stock.<BR>b) the number of labour hours available for production before incurring overtime.<BR>c) the production budget for DELTAS AND OMEGAS required to meet the budgeted sales.<BR>d) the material purchases budget in kilograms and cost<BR>e) the labour budget in hours and cost.<BR><BR>a) delta - 330 omega - 352.<BR>b) 22,464.<BR>c) delta - 3300 omega 2550<BR>d) kgs - 86,500 cost - £659,960<BR>e) hours - basic 22,464, overtime 5536 - cost wages cost 112,320 - overtime cost 41,520.<BR><BR>if im wrong could somebody point me in the right direction.<BR><BR>many thanks<BR><BR>sebula.

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    have i got this right?

    I hope this helps<BR><BR>a) delta - 330 omega - 352. AGREE<BR>b) 22,464.AGREE<BR>c) delta - 3300 omega 2550 NO<BR>Sales + Closing stock â?? opening stock = required production<BR>Then gross up for faulty products by dividing by 0.9<BR>= 3000 and 2500<BR>d) kgs - 86,500 cost - £659,960<BR>81,280 kgs costing £568,960<BR>e) hours - basic 22,464, overtime 5536 - cost wages cost 112,320 - overtime cost 41,520.<BR>Overtime 24,000 hrs less 22,464 hrs= 1,536 hrs at £7.50 = £11,520 probably due to earlier error<BR><BR>Sandy
  • System
    System Posts: 100,534 🤖 Admin 🤖
    have i got this right?

    how did you get 22,464 hours this is the basic wages cost, i got over time 0f 5536 x 7.50 overtime rate = 41,520.<BR><BR>do you think the examiner would fail me on this if this was the exam.<BR><BR>you're input would be most appreciated<BR><BR>sebula
  • System
    System Posts: 100,534 🤖 Admin 🤖
    have i got this right?

    You are right basic hours 22,464<BR>The overtime hours are just the extra hours over the basic hours <BR>You based your answer on your production figures<BR>Based on the 3000 Delta and 2500 Omegas the total hours are 1536 more than the basic<BR>at £7.50 per hour this would cost £11,520

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