Omega Budget Example Solution

Omega Document Case Company
Budget Example- text distributed in class- to be covered during the first week. 1. Sales Budget y/e 31 Dec 2003 number of cases sold selling price per case ₤ Sales Revenue ₤
Delta 4.000 60 240.000
Alpha 2.500 55 137.500 377.500
2. Production Budget y/e 31 Dec 2003 number of cases Delta Alpha
Planned Sales 4.000 2.500
Desired ending finished goods inv. 1.100 500 total required 5.100 3.000
(less) beginning finished goods inv. 100 1.000 budgeted production (cases) 5.000 2.000 3.Direct Material Usage Budget y/e 31 Dec 2003 Material Content Delta Production Usage Material Content Alpha Production usage units/case cases units units/case cases
Leather 2 5.000 10.000 4 2.000 8000
Zips 1 5.000 5.000 2 2.000 4000 4.Direct material puchases budget y/e 31 Dec 2003 Leather Zips desired ending inv of raw matl's 8.000 2.000 units needed for production 18.000 9.000 total required 26.000 11.000
(less) beginning inv 6.000 1.000 purchase 20.000 10.000 cost per unit ₤ 3 1
Budgeted purchase costs ₤ 60.000 10.000 70.000 purchase of DM 5. Direct Labor Budget y/e 31 Dec 2003 Labor hr/case cases total labor hours rate per hr ₤ total labor cost ₤
Cutting Dept Delta 2,0 5.000 10.000 6 60.000 Alpha 1,5 2.000 3.000 6 18.000
Stitching Dept Delta 1,00 5.000 5.000 7 35.000 Alpha 0,50 2.000 1.000 7,0 7.000 120.000 6.Production Overheads budget y/e 31 Dec 2003 Cutting Dept (expected 13,000 DLH) Stitching Dept (expected 6000 DLH) Fixed Cost ₤ Var. Cost ₤ Fixed Cost ₤ Var. Cost ₤
Indirect Labor 7.000 3.000
Indirect Material 3.000 9.000,00
Maintenance 2.000 1.000 500 500,00
Business rates 6.000 1.000
Depreciation 8.000 2.000
Electricity 1.000 2.000 500 1.000,00
Budgeted overhead costs 24.000