Exercise 2 (Notes and Excercises on budgets)

Sales Budget
Units Weeks days/week Total days Sales/day
Elgar 845 13 5 65 13
Holst 1235 13 5 65 19
5 days per week as per nr 2 (Production labour)

Production Budget
Elgar Holst
Sales 845 1235
Plus: Closing Stock 78 266 (6,14 Days)
Required 923 1501
Less: Opening Stock 163 361
Produce 760 1140

Material Budget
Material Total days Req/day
Elgar 5320
Holst 9120
Production requirm. 14440 65 222.1538462
Plus: Closing Stock 2888 (13 days)
Required 17328
Less: Opening Stock 2328
Units to buy 15000
R/u 12
Purchase in Rand R 180,000

Direct Labour
Elgar Holst
Production 760 1140
Hours/unit 8 5
Hours required 6080 5700 11780
Rate/hour 8 8
Labour cost R 48,640 R 45,600 Normal pay R 94,240
Overtime R 472
Employees 24 Total Lab R 94,712
Hours/week 37
Weeks 13
Hours avalable 11544

Hours required 11780

Overtime hours 236
Overtime premium 2
Overtime payable R 472