Kramer Enterprise's

Increase in Selling
Year End 2015 Year End Price / Volume
2014
(times) (2015)

Units of Sales 160000 200000 0.9

Sales ($) 960000 1200000 1.15

Less: Cost of Goods Sold ($) 640000 800000

Gross Margin ($) 320000 400000

Less: Operating Expenses ($) 260000 310000

Operating Income ($) 60000 90000

Cost of goods
Variable sold

Semi variable Operating

expenses

Change in operating expenses from 2015

Change in Units from 2015 to 2014
Variable operating expense per unit
Fixed operating expense per unit

budgeted Operating Expenses ($) for 201

Meridian Industries
Prime Luxuria

Selling price 200 500

Direct materials 20 50
Direct labor 40 150
Manufacturing Overhead 40 100

Cost of good per unit 100 300

Expected to sell in 2016 no of

4500 1500
units

inventory 2015 end 200 75

2016 ending inventory 350 200

Material of luxuria
crimpson 1 per 1 unit of L (Price) 10

2015 end (2016 start) crimpson 100

stock
2016 end crimpson stock 0

PR Group manufactures

Aas Paas (1 unit in gram) 15

Budget for the year 2016

Amount
Revenues (10,000 units @ Rs. 8
80,000
per unit)

Direct Material

Fennel Seeds (10 grams per

2,000 Fennel seed
unit @ Rs. 0.02 per gram)
Sesame Seeds (5 grams per
7,500 Sesame seeds
unit @ Rs. 0.15 per gram)
Direct Labour : Mixing
(0.2 hours per unit @ Rs. 14 28,000
per hour)
Manufacturing Overheads
16,500
(40% is variable cost)

Total Cost 54,000

Profit 26,000
 Volume Units in 2016 144000
increase
Selling Price
Increase
times
Per unit sales 2015
$/unit 6

Per unit sales

6.9
increase $/unit
Budgeted sales ($)
2016 993600

Cost of good sold

2015 per unit 4

budgeted Cost of
Goods Sold ($) for 576000
2016

n operating expenses from 2015 to 2014 50000 remark2014-

2015
n Units from 2015 to 2014 40000
operating expense per unit 1.25
erating expense per unit 60000

Operating Expenses ($) for 2016 240000

units of Prime watches must be

produced in 2016 4650
Number of Crimpson units
required 1525
amount budgeted ($) for
purchase of Crimpson in 2016 15250

total budgeted cost of goods sold

($) 900000

total material cost if flexible budget is prepared

12900
on the basis of no of units

material reuqired
Quantity per Price for material
unit in gram Rate per gram for number of required
units in grams

10 0.02 129000 2580

5 0.15 64500 9675

 Total Material Cost Budgeted 12255

total labour cost if flexible budget is prepared on 12700

the basis of no of units

labour hour labour reuqired cost of labour

Rate per hour for number of
per unit units in hours required

0.2 14 2540 35560