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Resources for allFive key factors that affect the budgeting process: Demand:the annual demand or any relevant period‟s demand must be estimatedfirst before the purchases, production and expenses budgets can be Plant capacity: Is a critical factor especially in small firms in high Read More …
The following information relates to process 3, which receives inputs from Process 2, in Mighty Products Limited: During the period the above costs were incurred, 7,200 units of finished goods were transferred to stores. Normal loss is expected at 2% Read More …
Equivalent units: This is the number of equivalent fully complete units which the partly complete units represent. They are calculated as physical units x percentage of completion. The concept of equivalent units enables the accurate valuation of closing work in Read More …
Abnormal loss: Are losses that can be avoided during the production process and cannot therefore be termed as normal process losses. These cannot be foreseen and they are above the expected/normal losses. Abnormal loss = Actual loss – Normal loss. Read More …
Normal Loss: Refers to unavoidable losses arising from the nature of the Production process, thus it is necessary that they are charged as part of the cost of production. Any value realised from the sale of normal loss items should Read More …
The following data relates to Mugoiya Construction Company for the year ended December 31st 2003. Additional Information: 1. The contract value is Sh.550,000 and it is anticipated that there will be further costs of Sh.375,000, including guarantee and rectification claims. Read More …
Is a push through system that manufacturers finished products for inventory on the basis of demand forecasts. Also called material requirements planning. It is an alternative system of stocks management which does not assume an even or constant demand throughout Read More …
Just-In-Time is a stock management system in which production parts are received as needed rather than building up inventories. It is a demand pull manufacturing system in which each component in a production line is produced immediately as needed Read More …
Five basis of absorbing overhead costs: (i) Percentage of direct material costs =
Garnex Limited has 3 productive department; namely: Forming Machines Assembly The company also has two service departments; namely: Maintenance General The following is an analysis of the budgeted overhead costs for a 12-month period: Repair and maintenance costs allocated to: Read More …