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Budgetary Process Bake Ltd manufactures two products, known as AP and SG. AP is produced in department 1 and SG in department 2. The following...
Budgetary Process
Bake Ltd manufactures two products, known as AP and SG. AP is produced in department 1 and SG in department 2. The following information is available for 2012.
Standard material and labour costs: £
Material S 7.20 per unit
Material T 16.00 per unit
Director Labour 12.00 per unit
Overhead is recovered on a direct labour hour basis. The standard material and labour usage for each product is as follows:
Model AP Model SG
Material S 10 units 8 units
Material T 5 units 9 units
Direct Labour 10 hours 15 hours
The balance sheet for the previous year ended 2012 was as follows:
£ £ £
Fixed Assets:
Land 170,000
Buildings and equipment 1,292,000
Less: depreciation 255,000 1,037,000 1,207,000
Current Assets:
Inventories: Finished goods 99,076
Raw materials 189,200
Debtors 289,000
Cash 34,000
611,276
Less: current liabilities
Creditors 248,800 362,476
Net assets 1,569,476
Represented by
1,200,000 ordinary shares of £1 each 1,200,000
Reserves 369,476
