CA Intermediate · Cost and Management Accounting · Budgets and Budgetary Control
Sundaram Foods budgets production of 12,000 units for April. Opening stock of finished goods is 1,500 units and the closing stock target is 2,100 units. What is the sales budget in units for April?
Budgeted sales are 11,400 units. Units available are opening stock of 1,500 plus production of 12,000, which is 13,500; deducting the closing stock target of 2,100 leaves 11,400 units available to be sold during April.
- A11,400 unitsCorrect
- B12,600 units
- C13,500 units
- D10,800 units
Explanation
Sales = Opening stock + Production - Closing stock = 1,500 + 12,000 - 2,100 = 11,400 units. Check: 11,400 + 2,100 = 13,500 = 1,500 + 12,000. The option 12,600 adds the stock increase instead of subtracting it.
Did you get it right without looking?
One question tells you little. A timed set on Budgets and Budgetary Control shows your real accuracy, how long you take and where you lose marks.
More Budgets and Budgetary Control questions
- Surya Plastics budgets sales of 8,000 units for the next quarter. Opening finished stock is 1,200 units and the desired closing stock is 1,7…
- Sundaram Foods Pvt. Ltd. expects to sell 12,000 units in April and 15,000 units in May. Its policy is to hold closing finished stock equal t…
- Verma Ltd expects to sell 12,000 units in the next quarter. Opening finished stock is 1,500 units and the desired closing stock is 2,500 uni…
- A company prepares its budget by starting afresh each period, justifying every item of expenditure from zero base without reference to the p…
- A plant's total cost at 60% capacity is ₹9,80,000 and at 80% capacity is ₹11,40,000. Fixed cost stays constant and variable cost varies in d…
- Aarav Ltd. has a fixed overhead budget of Rs 2,40,000 per month at 80% capacity, with variable overhead of Rs 3 per unit. At 100% capacity t…