Niloy Neogi-1612631030

1. Prepare a direct material usage budget

Neptune Transport Company

Prepare a direct material usage budget

For the month ending October-30

Products
Details plastic Metal Total

Physical units' budget

Direct materials required for:

Cat-allac (520 units x 5 lbs,1 lb) 2600 lbs 520 lbs

Dog-erriffic (285 units x 6.5 lbs, 1.25 lb) 1852.5 lbs 356.25 lbs

Units of direct material to be used in the 4452.5 lbs 876.25 lbs

production

Cost of direct materials to be used

Available from beginning inventory

Plastic (200 lbs x4.7) $940

Metal (75 lbs x3.2) $240

From the month purchase:

Plastic (4452.5-200) lbs x 4.5 $19136.25

Metal (876.25-75) lbs x 3 $2403.75

Total direct material to be used in the $20076.25 $2643.75 $22720

production
1.Prepare a direct material purchased budget

Neptune Transport Company

Prepare a direct material purchased budget

For the month ending October-30

Products
Details plastic Metal Total

Physical units' budget

The total quantity of DM to be used 4452.5 lbs 876.25 lbs

(+) Target ending DM inventory 280 80

Total requirements 4732.5 lbs 956.25 lbs

(-) Beginning DM inventory 200 lbs 75 lbs

Units of DM to be purchased 4532.5 lbs 881.25 lbs

Cost of DM TO be purchased

Plastic (4532.5 x04.5 lbs) $20396.25

Metal (881.25 x 3 lbs) $2643.75

DM to be purchased in this month $20396.25 $2643.75 $23040

ii) Prepare a finished goods inventory budget
Neptune Transport Company

Prepare a finished goods inventory budget

For the month ending October-30

Products
Cat-allac Dog-eriffic
Details Cost per Input per Total Cost per Input per Total
units of units of units of units of
output output output output

Plastic $4.5 5 22.5 4.5 6.5 29.25

Metal 3 1 3 3 1.25 3.75

Direct 11 3 33 11 5 55
manufacturing
labor

Manufacturing 20.3 3 61.5 20.3 5 102.5

overhead rate

Total 120 190.5

Cat-allac Dog-eriffic
Units of finished goods to be produced 520 285

Direct Materials 20396.25 2643.75

Direct Labors 17160 15675

Manufacturing Overheads 31980 29212.5

Total Cost of Finished Goods $69536.25 $47531.25

iii) Neptune's rate of return on investment.

Rate of return on investment: (total operating income/ total investment capital)

= {(10000/500000) *100}

=2%

iii)Compute the selling price for Cal-allac and Dog-eriffic, if Neptune charge
60% mark-up on its unit product cost.

selling price for Cal-allac if Neptune charge 60% mark-up on its unit product
cost

= Cost base+ Mark up

=120+(120*60%)

=192

iii)Selling price for Dog-eriffic if Neptune charge 60% mark-up on its unit
product cost

= Cost base+ Mark up

=190.5+(190.5*60%)

=304.8
 Answer to the question no. 1 (iv)

iv) A budget is an estimation of income and costs over a predefined future time frame and is
usually arranged and reconsidered on an occasional premise. Financial plans can be made for an
individual, a gathering of individuals, a business, a legislature, or pretty much whatever else that
makes and goes through cash. The budget is a record that the administration prepares to gauge
the incomes and costs for a forthcoming period dependent on their objectives for the business.
One of the motivations behind the spending plan is assessment and control. It assesses the
exhibition by comparison of real and planned outcomes and later controls it by executing a few
mechanisms. The CEO ought to likewise "Stretch" focus of higher income and lower the
expenses. There are two types of budget are the following:

1) Functionals Budget

2) Financial Budgets

From the functional budget point of view, we have prepared production budget, materials
purchase budget, materials usage budget, statement of profit-loss, and so on.

The question may the CEO pose to the supervisory group while looking into the financial plans
that I have to get ready in the above are the following:

For deals sales budget

•"Is the business income is developing? If yes, is it faster than the market?

•Should organization save an extra amount on publicizing and marketing for development?

For production and materials utilization budget,

1.Could coordinate materials inventory be diminished?

2. Could creation be all the more firmly custom-fitted e request?

3. Can the proficiency and profitability of direct materials and overheads be expanded?

For the identification proof of any issue in their planned outcomes, there should be a correlation
device. We can contrast earlier month or year results and the present one to get thought of the
proposed issue. As the absence of the foreordained objective setting, the planned issue can't be
identified
The key benefit of business planning is that it allows you to create a focus for the direction of
your business and provides targets that will help your business grow. It will also give you the
opportunity to stand back and review your performance and the factors affecting our industry.

1.A more exceptional ability to make continuous improvements and anticipate problems

2.sound financial information on which to base decisions

3.improved clarity and focus

4.a greater confidence in your decision-making

To use our budgets effectively, we will need to review and revise them frequently. This is
particularly true if our business is growing and our Planning to move into new areas. Using up to
date budgets enables me to be flexible and also lets me manage our cash flow and identify what
needs to be achieved in the next budgeting period.
2-i) Minimum Units to be produced

X101 Y200 Z450

Sales per unit 90 60 70

(-) Direct 27 18 21
materials
63 42 49
(-) Direct labors 29 35 30

Contribution $34 $7 $19

DM Cost per 9 6 7
pound

Contribution per 3.8 1.2 2.7

metal pound

Limiting factor (3.8/9) =0.42 (1.2/6) = 0.25 (2.7/7) =0.32

per unit
Rank 1 3 2

If Quantity of DM per unit is not given:

Quantity of DM per unit: (Total DM Cost/ DM cost per unit)

X101: $27/$3= 9

Y220: $18/$3= 6

Z450: $21/$3= 7
2-i) Minimum Units to be produced
X101 Y220 Z450 Total

Minimum Production 200 200 200

Quantity of (DM) per Unit 9 6 7

Total (DM) required to 1800 1200 1400 4400

2-i) Unit to be produced

X101 Z450 Y220 Total

Minimum Production 300 295 206

Quantity of (DM) per Unit 9 7 6

Total (DM) required to 2700 2065 1235 6000

Maximum pound available 6000 pounds. According to the rank, X101 and Z450
will produce (2700+2065) = 4765 pounds, rest Y220 Will produce 1235 pounds.
So, units to be produced X101, Y220, and Z450 are 300, 206 and, 295 units
respectively.
2-ii) Assuming there is enough demand for X101 in the market &
fixed cost will remain unchanged –
X101

Selling Price $90

Less: Variable Costs (excluding DM)

Labor & Other Costs 29

Contribution Margin Per Unit (before considering DM) $61

Quantity of (DM) per Unit 9

DM Cost per unit Wechsler will be willing to pay without $7

Additional Payment=( $7/lb-$3/lb) = $4/lb

Extra Units= 500 lb/9lb = 55.55 units

2-ii) Assuming there is enough demand for Y220 in the market &
fixed cost will remain unchanged –
Y220

Selling Price $60

Less: Variable Costs (excluding DM)

Labor & Other Costs 35

Contribution Margin Per Unit (before considering DM) $25

Quantity of (DM) per Unit 6

DM Cost per unit Wechsler will be willing to pay without $4.16

Additional Payment= ($4.16/lb-$3/lb) = $1.16/lb

Extra Units= 500 lb/6lb = 83.33 units

2-ii) Assuming there is enough demand for Z450 in the market &
fixed cost will remain unchanged –
Z450

Selling Price $70

Less: Variable Costs (excluding DM)

Labor & Other Costs 30

Contribution Margin Per Unit (before considering DM) $40

Quantity of (DM) per Unit 7

DM Cost per unit Wechsler will be willing to pay without $6

Additional Payment=( $6/lb-$3/lb) = $3/lb

Extra Units= 500 lb/7lb = 71.42 units

Answer to the question no. 2 (iii)

Now,
Current maximum available pounds: 6000 pounds
Spoiled metal: 600 pounds
Currently available metal: 5400 pounds
Revised production plan:

Unit to be produced
X101 Y220 Z450 Total

Minimum Production 300 200 215

Quantity of (DM) per Unit 9 6 7

Total (DM) required to 2700 1200 1500 5400

According to the production Rank, X101 will produce full capacity of 300 units
which comprises of 2700 pounds. As limitation of metal pounds, Y220 will
produce minimum capacity of 200 units which comprises of 1200 pounds.

As X101 and Y220 covered (2700+1200) = 3900 pounds. Rest 1500 pounds will
be prepared from Y220 and it covers 215 units.

So, units to be produced 300, 2000 and, 215 units respectively.

Answer to the question no. 2 (iv)

X101 Y200 Z450

Sales per unit 90 60 70

(-) Direct materials 27 18 21

Contribution dropping 63 42 49
DL and others

Limiting factor per unit 0.42 0.25 0.32

Dropout Contribution 150 168 153

Rank 2 1 3

In case the availability of materials mixes further, Lathorp shouldn't think about
dropping the least profitable thing. To dropout the least gainful, there are two
estimates that ought to be thought of. One is a poor responsibility edge, and
another is changed advantage pondering avoidable fixed costs. Larthop doesn't
have any realized fixed costs for any of the item contributions.

Thus, Larthop should proceed with least gainful item in spite of the fact that having
scant wellspring of direct materials.

At some point the administrators consider subjective factors separated from

quantitative variables. The non-money related variables to consider include:

1.Possible redundancies among the workforce

2.Signals which it might provide for contenders, who may see the organization as
being reluctant to help its items.
3.The response of clients, especially the individuals who may as of late have
bought the item.

Sometimes, even when management has made the decision to discontinue a

product or activity, there is still a further decision to be made when to discontinue
it.

Answer to the question no. 3

Financial Planning is the way toward making an arrangement to go through our cash. This
spending plan is known as a financial plan. Making this spending plan permits you to decide
ahead of time whether we will have enough money to do the things we have to do or might want
to do. Budgeting is naturally balancing our expenses with our income. If we don't adjust and we
spend more than we make, we will have an issue. Numerous individuals don't understand that
they spend more than they procure and gradually sink further into obligation consistently. If we
need more cash to do all that we might want to do, at that point, you can utilize this arranging
procedure to organize our spending and spotlight our cash on the things that are generally
significant. Without an individual personal budget, the majority have a hard time checking how
much cash they go through and where their cash goes. If you have ever gone to an ATM to pull
back cash and been amazed to find how little you had left in your record, this area is for you. It's
likewise for any individual who needs to figure out how to deal with their cash better and more
brilliant—which is a priceless aptitude to have during the penny-squeezing long periods of
school yet also later on throughout everyday life.

The benefits of personal budgets are the following:

1. Gives you control over your money – A financial plan is a method of being deliberate about
how you go through and set aside your cash. It is said that with Planning, we control our cash
and not our cash controls to me. Planning spares you the pressure of abruptly acclimating to the
absence of assets since you didn't at first arrange how to spend them.

2. Keeps you focused on your money goals – we abstain from spending superfluously on
things and administrations that don't add to accomplishing your budgetary objectives. On the off
chance that we are working with restricted assets, Planning makes it simpler to make a decent
living.

3. Enables you to produce extra money – In budgeting, we get the chance to distinguish and
dispose of extra spending like late charges, punishments, and interests. These little sparing can
include after some time.

Since the most recent couple of years, the number of private vehicles has expanded in our nation.
One of the fundamental reasons is Uber. A parcel of individuals engaged with Uber by
purchasing vehicles and making enlistment. From the start to draw in individuals, Uber gave a
lot of motivating forces. Step by step colossal number of individuals got pulled in. There are
loads of individuals who contributed attractive sum from their investment funds or by taking
credits to purchase vehicles with the goal that they can win more. We, as a whole, realize that the
future is unsure. At present, individuals are earning less as they used to earn through Uber
administration. Impetuses are less. Clients have different alternatives in the market. Additionally,
in view of Covid-19 ride-sharing, administrations are off. Presently individuals who contributed
their own reserve funds or credit advances checking interest cost, support cost with zero salaries.
That is the reason before putting resources into any task; one ought to consider if this is the best
decision for the person in question. The person in question ought to learn the amount to
contribute from the start. As a model, an individual who purchased various vehicles for ride-
sharing assistance earing nothing now. A gigantic measure of cash is obstructed with those
vehicles. In the event that the venture the person made is the main reserve funds, at that point,
anybody can anticipate that the individual spending hopeless days. On the off chance that I have
graduated as of late and found a better than average line of work, I won't make any move to by a
vehicle with my own cash or even via vehicle advance. With the compensation of my new
activity, I will have a go at sparing it however much as could reasonably be expected for future.
Most of graduate understudies with their new openings may do the contrary advance. Vehicle
costs are less now-a-days, vehicle credit accessibility is simple which will give charge deductible
favorable position. A vehicle can give fascination in the general public and an agreeable life
however individuals ought to likewise keep in their brain that with advance intrigue cost and all
other support cost, each year they additionally need to make good on-street grant charge,
wellness expenses and so on which is least TK-25000 to government. Purchasing a vehicle is
simple yet keeping up the vehicle is troublesome. Employment uncertainty is dynamic in
Bangladesh. That is the reason I won't take any additional weight with my new activity yet on
the off chance that the vehicle is a blessing sure I will acknowledge it.