Topic – Budgetary Control
#Q.1) Discuss Zero Base Budgeting as a toll of planning and controlling. 10 Marks
#Q.2) Calculate efficiency and activity ratio from the following data:
|Budgeted output||=||6,000 units|
|Actual output||=||5,000 units|
|Standard Time per unit||=||4 hours|
#Q.3) AK Limited produces and sells a single product. Sales budget for calendar year 2013 by a quarters is as under:
|No. of units to be sold||18,000||22,000||25,000||27,000|
The year is expected to open with an inventory of 6,000 units of finished products and close with inventory of 8,000 units. Production is customarily scheduled to provide for 70% of the current quarter’s sales demand plus 30% of the following quarter demand. The budgeted selling price per unit is Rs.40. The standard cost details for one unit of the product are as follows:
Variable Cost Rs. 34.50 per unit
Fixed Overheads 2 hours 30 minutes @ Rs. 2 per hour based on a budgeted production volume of 1,10,000 direct labour hours for the year. Fixed overheads are evenly distributed throughout the year.
You are required to:
1. Prepare Quarterly Production Budget for the year.
2.In which quarter of the year, company expected to achieve break-even point-30 Marks