Profit Planning and Control :Developing Revenue Budget

Problem :Emami Cosmetics manufactures and sells two beautification cream, Fair
and Lovely. In July 2012, Companys Budget Department gathered the following
data in order to prepare budgets for 2013:
2013 Projected Sales
Produc
Unit
Price
t
s
Fair
5100
Rs 210
0
Lovely
3900
Rs 220
0
Stocks
Ope
Closing
Positio
ning
ns
Produc
Janu
December 31,
t
ary1
2013
,
201
3
Fair
1800
23000
0
Lovely
7000
8000
To produce 1 unit of Fair and Lovely, the following direct
materials are used:

Direct
materi
al
A
B
C

Unit

Kg
Kg
Kg

Amount used
per Unit
F
Lo
a
vel
i
y
r
5
6
3
4
1
2

Projected data for 2013 with respect to direct materials are as follows:
Dir
Pur
Ope
Closi
ect
cha
ning
ng
ma
se
Inve
Inve
ter
Pric
ntori
ntori
ial
e
es
es
1

A
B

Rs.1
3
Rs.6

Rs.4

Janu
ary
1,
2001
3
31,00
0 kg
29,00
0 kg
6,000
kg

Dece
mber
31,
2001
3
35,00
0 kg
31,00
0 kg
6,000
kg

Projected direct manufacturing labor requirements and rates for 2013

are as follows:
Product
Hou
Ra
rs
te
per
pe
Unit
r
ho
ur
Fair
3
Rs.
13
Lovely
4
Rs.
17
Manufacturing overhead is allocated at the rate of Rs.28 per direct
manufacturing labour-hour.

1.
2.
3.
4.
5.
6.
ss

Prepare the following budgets:

Revenue budget( in Rs.)
Production budget (in units)
Direct materials purchases budget (in quantities)
Direct materials purchases budget (in Rs.)
Direct manufacturing labour budget (in Rs.)
Value of budgeted finished goods inventory at December 31, 2013 (in Rs.)