Ch4

Question 1

Standard costs?

Answer 1

Ideal-impossible
Attainable-realistic
Basic-out of date
Current-no insensitive to improve

Question 2

Layout for a budget

Answer 2

Sales:
Sales volume
Selling price/unit
=Revenue

Production:
Sales volume
+closing inventory
- opening inventory
=units of production required
+defective units
=total units required

Material usage:
Production of A (vol x kg/unit)
Production of B (vol x kg/unit)
=Material usage for production
+wastage
=total material usage

Material purchase:
Material usage
+opening inventory
-closing inventory
=purchases required
Price/kg
=total material cost

Labour utilisation:
Production of A
Production of B
=labour hours for production
+idle hours
=total labour in hrs
Rate per hour
=total labour cost

Question 3

Layout for a cash budget

Answer 3

Cash receipts:
Customer receipts
Proceeds from assets
Cash introduced
=total cash in

Cash payments:
Payments to suppliers
Payments to employees
Purchases of assets
Overhead payments
Loan repayments
=total cash out

+opening cash
=closing cash