Times Ltd manufactures two types of watch "Goldstar" and "Silverstar" - Leaving Cert Accounting - Question 9 - 2010

To prepare the Production Budget:

• Required for sales
• Add closing stock
• Less opening stock

For Goldstar:

• Required for sales: 1400 units

• Add closing stock: 210 units

• Less opening stock: 180 units

  $ext{Units Produced} = ext{Required for Sales} + ext{Closing Stock} - ext{Opening Stock} = 1400 + 210 - 180 = 1430 ext{ units}$

For Silverstar:

• Required for sales: 1800 units

• Add closing stock: 160 units

• Less opening stock: 220 units

  $ext{Units Produced} = 1800 + 160 - 220 = 1740 ext{ units}$

To calculate the Material Usage Budget, we will determine the total material used for each watch type based on the material content:

For Goldstar:

• Material A: 2 grams × 1430 units = 2860 grams
• Material B: 3 grams × 1430 units = 4290 grams

For Silverstar:

• Material A: 3 grams × 1740 units = 5220 grams
• Material B: 4 grams × 1740 units = 6960 grams

Summing total materials used:

• Total for Goldstar:

  • Material A: 2860 grams
  • Material B: 4290 grams

• Total for Silverstar:

  • Material A: 5220 grams
  • Material B: 6960 grams

To prepare the Materials Purchases Budget:

1. Required for production
2. Add Closing stock
3. Less Opening stock

For Material A:

• For Goldstar: 2860 grams (required for production)

• Add closing stock: 240 grams

• Less opening stock: 240 grams

  $ext{Purchases} = 2860 + 240 - 240 = 2860 ext{ grams}$

For Material B:

• For Goldstar: 4290 grams

• Add closing stock: 300 grams

• Less opening stock: 300 grams

  $ext{Purchases} = 4290 + 300 - 300 = 4290 ext{ grams}$

For Silverstar: Repeat the same method using the corresponding values.

To prepare the Labour Budget:

• Calculate units produced
• Labour rate per hour with given hours
• Total wage calculation

For Goldstar:

• Units produced: 1430

• Direct Labour time in hours per unit: 8 hours

• Labour rate per hour: €9

  $ext{Total Labour Cost} = ext{Units Produced} imes ext{Labour Time in hours} imes ext{Labour Rate} = 1430 imes 8 imes 9 = €102,960$

For Silverstar:

• Units produced: 1740

• Labour time: 5 hours

  $ext{Total Labour Cost} = 1740 imes 5 imes 9 = €78,300$

Summing Labour Costs: Total Labour Budget: €102,960 (Goldstar) + €78,300 (Silverstar) = €181,260