Functional Budgets – NBC Institute

MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

Question

ABC Limited is engaged in the production of AiBiCi product and the following data were extracted from the Budget Committee’s Report:

i. Sales is expected to be 20,000 units each in months 1 and 2, this will increase by 10% each in months 3 and 4, and 5% each in months 5 and 6.

ii. Unit selling price is currently estimated at N250, and due to increased awareness, the price will move up to N300 in the fourth month.

iii. To produce one unit of AiBiCi, the following materials are required:

2kgs of A @ N20/kg
5kgs of B @ N5/kg
2kgs of C @ N10/kg

iv. The company keeps 10% of estimated sales as closing inventory for the month. Assume no opening inventory for month 1.

You are required to compile, in tabular form, the following functional budgets for the next 6 months:

a. Sales in quantity and value. (6 Marks)

b. Production in quantity. (6 Marks)

c. Material purchase in quantity and the total cost. (8 Marks)

(Total 20 Marks)

Answer

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Tags: Budget Committee, Budgeting, Cost Management, Financial planning, Functional Budgets, Material Purchase, Production Budget, Sales Budget
Level: Level 1

Topic: Budgeting
Series: NOV 2015

MI – Nov 2015 – L1 – SA – Q12 – Budgeting

Identifies which option is not considered a functional budget.

Question

he following are functional budgets EXCEPT:
A. Distribution cost budget
B. Production budget
C. Sales budget
D. Material purchase budget
E. Cash budget

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgeting, Cost Management, Functional Budgets
Level: Level 1

Topic: Budgeting
Series: NOV 2015

MI – May 2016 – L1 – SA – Q7 – Budgeting

Identify the budget that is not a functional budget from the given options.

Question

The following are functional budgets EXCEPT:
A. Sales budget
B. Production budget
C. Distribution budget
D. Cash budget
E. Selling cost budget

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Budget, Distribution Budget, Functional Budgets, Production Budget, Sales Budget, Selling Cost
Level: Level 1

Topic: Budgeting
Series: MAY 2016

IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour

Prepare functional budgets for sales, production, and direct material purchases for Naa Sei enterprise.

Question

Naa Sei enterprise wishes to prepare his functional budgets for the year 2023. The following information has been provided.

Sales

Year	Quarter	Units
2023	1	1,200
2023	2	1,500
2023	3	2,000
2023	4	1,800

2024

Year	Quarter	Units
2024	1	2,200
2024	2	2,300

The projected selling price is GH¢15 for the first two quarters, and this will increase by 10% in the third quarter. There will be no further price increase.

Inventory policy
i) Finished Goods: The company plans to keep 10% of the following quarter’s sales quantity. The opening inventory of finished goods is 120 units.
ii) Direct Materials: Only one material is used in production. 5 kilograms of the material are required for the production of a unit of a product. Closing inventory is expected to be 20% of the following quarter’s requirement. The cost of material is expected to be GH¢2 per kilogram.

Required:
Prepare the following functional budgets for each of the four quarters in 2023.
a) Sales
b) Production
c) Direct material purchases in value

Answer

Find Related Questions by Tags, levels, etc.

Tags: Direct Material Purchases, Functional Budgets, Production Budget, Sales Budget
Level: Level 1

Topic: Budgeting, Cost and Cost Behaviour
Series: MAR 2023

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

Question

a) The following information has been extracted from the records of a company for the half-year ended 31 March 2021. A product, Capital Q, goes through two processes, X and Y:

Details relating to Process X for the period: Input units: 5,000 Finished units transferred to Process Y: 3,200 Closing WIP: 840 Normal losses: 10%

Normal losses have an estimated resale value of GH¢4 per unit.

Costs incurred during the period:

	GH¢
Direct materials	31,250
Direct labour	21,200
Overheads	17,325

Abnormal Losses and Closing WIP had the following degrees of completion at the end of the period:

	Direct materials	Direct labour	Overheads
Abnormal Losses	100%	80%	50%
Closing WIP	100%	80%	50%

Required: Using the weighted average method: i) Compute the cost per unit for each of the element of costs. (5 marks)

b) Compute the value of the complete units transferred to Process Y. (5 marks)

c) Compute the value of the closing WIP. (5 marks)

d) Prepare Process X Account for the period. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Cost per Unit, Functional Budgets, Principal Budget Factor, Process Account
Level: Level 1

Topic: Budgeting, Process Costing
Series: APR 2022

MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

Question

ABC Limited is engaged in the production of AiBiCi product and the following data were extracted from the Budget Committee’s Report:

i. Sales is expected to be 20,000 units each in months 1 and 2, this will increase by 10% each in months 3 and 4, and 5% each in months 5 and 6.

ii. Unit selling price is currently estimated at N250, and due to increased awareness, the price will move up to N300 in the fourth month.

iii. To produce one unit of AiBiCi, the following materials are required:

2kgs of A @ N20/kg
5kgs of B @ N5/kg
2kgs of C @ N10/kg

iv. The company keeps 10% of estimated sales as closing inventory for the month. Assume no opening inventory for month 1.

You are required to compile, in tabular form, the following functional budgets for the next 6 months:

a. Sales in quantity and value. (6 Marks)

b. Production in quantity. (6 Marks)

c. Material purchase in quantity and the total cost. (8 Marks)

(Total 20 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budget Committee, Budgeting, Cost Management, Financial planning, Functional Budgets, Material Purchase, Production Budget, Sales Budget
Level: Level 1

Topic: Budgeting
Series: NOV 2015

MI – Nov 2015 – L1 – SA – Q12 – Budgeting

Identifies which option is not considered a functional budget.

Question

he following are functional budgets EXCEPT:
A. Distribution cost budget
B. Production budget
C. Sales budget
D. Material purchase budget
E. Cash budget

Answer

Find Related Questions by Tags, levels, etc.

Tags: Budgeting, Cost Management, Functional Budgets
Level: Level 1

Topic: Budgeting
Series: NOV 2015

MI – May 2016 – L1 – SA – Q7 – Budgeting

Identify the budget that is not a functional budget from the given options.

Question

The following are functional budgets EXCEPT:
A. Sales budget
B. Production budget
C. Distribution budget
D. Cash budget
E. Selling cost budget

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Budget, Distribution Budget, Functional Budgets, Production Budget, Sales Budget, Selling Cost
Level: Level 1

Topic: Budgeting
Series: MAY 2016

IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour

Prepare functional budgets for sales, production, and direct material purchases for Naa Sei enterprise.

Question

Naa Sei enterprise wishes to prepare his functional budgets for the year 2023. The following information has been provided.

Sales

Year	Quarter	Units
2023	1	1,200
2023	2	1,500
2023	3	2,000
2023	4	1,800

2024

Year	Quarter	Units
2024	1	2,200
2024	2	2,300

The projected selling price is GH¢15 for the first two quarters, and this will increase by 10% in the third quarter. There will be no further price increase.

Required:
Prepare the following functional budgets for each of the four quarters in 2023.
a) Sales
b) Production
c) Direct material purchases in value

Answer

Find Related Questions by Tags, levels, etc.

Tags: Direct Material Purchases, Functional Budgets, Production Budget, Sales Budget
Level: Level 1

Topic: Budgeting, Cost and Cost Behaviour
Series: MAR 2023

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

Question

a) The following information has been extracted from the records of a company for the half-year ended 31 March 2021. A product, Capital Q, goes through two processes, X and Y:

Details relating to Process X for the period: Input units: 5,000 Finished units transferred to Process Y: 3,200 Closing WIP: 840 Normal losses: 10%

Normal losses have an estimated resale value of GH¢4 per unit.

Costs incurred during the period:

	GH¢
Direct materials	31,250
Direct labour	21,200
Overheads	17,325

Abnormal Losses and Closing WIP had the following degrees of completion at the end of the period:

	Direct materials	Direct labour	Overheads
Abnormal Losses	100%	80%	50%
Closing WIP	100%	80%	50%

Required: Using the weighted average method: i) Compute the cost per unit for each of the element of costs. (5 marks)

b) Compute the value of the complete units transferred to Process Y. (5 marks)

c) Compute the value of the closing WIP. (5 marks)

d) Prepare Process X Account for the period. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Abnormal Loss, Cost per Unit, Functional Budgets, Principal Budget Factor, Process Account
Level: Level 1

Topic: Budgeting, Process Costing
Series: APR 2022

Question Tag: Functional Budgets

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MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

MI – Nov 2015 – L1 – SA – Q12 – Budgeting

Identifies which option is not considered a functional budget.

MI – May 2016 – L1 – SA – Q7 – Budgeting

Identify the budget that is not a functional budget from the given options.

IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour

Prepare functional budgets for sales, production, and direct material purchases for Naa Sei enterprise.

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

MI – Nov 2015 – L1 – SA – Q12 – Budgeting

Identifies which option is not considered a functional budget.

MI – May 2016 – L1 – SA – Q7 – Budgeting

Identify the budget that is not a functional budget from the given options.

IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour

Prepare functional budgets for sales, production, and direct material purchases for Naa Sei enterprise.

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

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Question Tag: Functional Budgets

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MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

You're reporting an error for "MI – Nov 2015 – L1 – SB – Q2 – Budgeting"

MI – Nov 2015 – L1 – SA – Q12 – Budgeting

Identifies which option is not considered a functional budget.

You're reporting an error for "MI – Nov 2015 – L1 – SA – Q12 – Budgeting"

MI – May 2016 – L1 – SA – Q7 – Budgeting

Identify the budget that is not a functional budget from the given options.

You're reporting an error for "MI – May 2016 – L1 – SA – Q7 – Budgeting"

IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour

Prepare functional budgets for sales, production, and direct material purchases for Naa Sei enterprise.

You're reporting an error for "IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour"

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

You're reporting an error for "IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing"

MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

You're reporting an error for "MI – Nov 2015 – L1 – SB – Q2 – Budgeting"

MI – Nov 2015 – L1 – SA – Q12 – Budgeting

Identifies which option is not considered a functional budget.

You're reporting an error for "MI – Nov 2015 – L1 – SA – Q12 – Budgeting"

MI – May 2016 – L1 – SA – Q7 – Budgeting

Identify the budget that is not a functional budget from the given options.

You're reporting an error for "MI – May 2016 – L1 – SA – Q7 – Budgeting"

IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour

Prepare functional budgets for sales, production, and direct material purchases for Naa Sei enterprise.

You're reporting an error for "IMAC – Mar 2023 – L1 – Q2 – Budgeting | Cost and Cost Behaviour"

IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing

Computation of costs and preparation of Process X account using the weighted average method, and preparation of functional budgets for a manufacturing firm.

You're reporting an error for "IMAC – APRIL 2022 – L1 – Q1 – Budgeting | Process Costing"

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