Production Budgets

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Production Budgets

Attempt the ten questions below and then click 'Submit'.

Q1. Sales are expected to be 11,000 units. Opening Stock is 3,000 units, Closing Stock needs to be 2,000 units. How many products will we produce? *

10 points

11,000

12,000

10,000

16,000

Q2. We are producing 4,500 units of Product Y, which requires 4kg of Material 1 (at €3.50 per kg) and 6kg of Material 2 (at €4.25 per kg). If Opening Stock of Material 1 is 2,000kg and Opening Stock of Material 2 is 3,000kg, how much will we spend buying Raw Materials (no Closing Stock is required)? *

10 points

€56,000

€177,750

€158,000

Option 4

Q3. In calculating the total Cost of Production, how do we deal with the Stock of Raw Materials? *

10 points

The cost of Opening Stock is added to the Raw Materials Purchase Price and the cost of Closing Stock is Subtracted

The cost of Closing Stock is added to the Raw Materials Purchase Price and the cost of Opening Stock is Subtracted

The cost of Opening / Closing Stock do not need to be added or subtracted to/from the Raw Materials Purchase Price

Q4. We are producing 7,000 products. The Skilled Labour Rate is €6 per hour and each product takes 4.5 hours to make. The total charge for Skilled Labour will be... *

10 points

€27

€31,500

€42,000

€189,000

Q5. A Production Budget shows us... *

10 points

A breakdown of our expected income and expenditure for each month

How much our expected production costs are likely to be in the coming months

How much we have spent on producing our products over the last few months

How our income and expenditure are likely to change at a variety of different sales levels

Q6. To calculate our Sales figure for the Trading Account, we need to... *

10 points

Multiply our expected Sales units by the value of the Opening Stock

Multiply our expected Sales units by the value of the Closing Stock

Multiply our expected Sales units by the expected Selling Price

Multiply our expected Sales by the expected price of Raw Materials

Q7. Opening Stocks of Products 1&2 were 5,000 units and 8,000 units respectively. If all stocks are to be increased by 20% from their opening levels by the end of the year, what will our Closing Stock in units be? *

10 points

4,500 & 7,200

4,000 & 6,400

5,500 & 8,800

6,000 & 9,600

Q8. If our stock is valued using the 'FIFO' method, what does this stand for? *

10 points

Fast In, First Out

First In, First Out

First In, Fast Out

Fast In, Fast Out

Q9. Which of the following factors would a business have given most consideration to, before arriving at their predicted sales figure for the year? *

10 points

The sales volume from previous years

The age of the staff employed

The depreciation of the factory

The cleanliness of the warehouse

Q10. An 'Overhead' is... *

10 points

Any expense related to the running of the business

An expense that is directly related to the manufacturing of a product (e.g Factory Wages)

An expense that is not directly related to the manufacturing of a product (e.g Canteen Costs)

Submit

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