1. Problem: 9-43.
Page no: 391 -392
1. Sales Budget
Products
Type C
Type P
Unit sold
X Selling Price
500,000
0.9
500,000
1.3
Total Sales revenue
450,000
650,000
1,100,000/=
2. Production Budget
Products
Type C
Type P
Unit sold
+ FG at End
- FG at Start
500,000
5,000
(10,000)
500,000
15,000
(20,000)
Units to be produced
495,000
495,000
3. Material Usage
Products
Type C
Type P
Material Usage
Unit Produced
Paperboard
Corrugating medium
495,000
148,500
99,000
495,000
346,500
148,500
495,000
247,500
4. Material Purchase Budget
Products
Paperboard
Corrugating medium
Material Usage
+ Material at End
- Material at Start
495,000
5,000
(15,000)
247,500
10,000
(5,000)
Material usage (QTY)
X Purchase Price
485,000
0.2
252,500
0.1
Purchase Price Budget
97,000
25,250
5. Direct – Labor Budget
Products
Units
Unit Per Hour
Total Hour
Rate Per Hour
Direct Labor

2. Produced X
=
X
Cost
Type C
495,000
0.0025
123.5
12
14,850
Type P
495,000
0.005
2475
12
29,700
3712.5/=
44,550/=
6. Manufacturing Overhead Budget
Overhead Budget
148,500
Selling and Administration
210,000
7. Income Statement
Sales
1,100,000
Less: COGS
(320,000)
Gross Profit
780,000
Less: Selling and administration
(210,000)
EBT
570,000
Less: Tax @ 40%
(228,000)
Net Income
342,000/=
8. Per Unit Cost
Type C
Type P
Direct Material
Direct Material
Paperboard
=
0.06
Paperboard
=
0.14
Corrugating medium (0.2 X 0.1) =
0.02
Corrugating medium (0.3 X 0.1) =
0.03
Direct Labor
(0.3 X 0.2)
Direct Labor
(0.7 X 0.2)

3. D/L (0.0025 X 12)
=
0.03
Factory Overhead
D/L (0.005 X 12)
=
0.06
=
0.2
Factory Overhead
FOH (0.0025 X 40)
=
FOH (0.005 X 40)
0.21/=
Per Unit cost
0.1
Per Unit cost
0.43/=
FOH Rate:
FOH Rate
=
FOH / Direct Labor Hour
FOH Rate
=
148,500 / 3,712.50
FOH Rate
=
40
=
Unit Sold
COGS:
Products
X
V.C
=
COGS
Type C
500,000
0.21
105,000
Type P
500,000
0.43
215,000
320,000/=