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CIMA BA2 Practice Test Chapter 6-Budgeting
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CIMA BA2 Practice Test Chapter 6-Budgeting
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BA 2 - Fundamentals of Management AccountingPractice questions
Budgeting
Chapter six
, 1
01. A company manufactures two products, Aye and Bee. Expected cost data for the products
for next year are as follows:
Product A Product B per
per unit unit
Direct materials:
X at $2 per kg 24 kg 30 kg
Y at $5 per kg 10 kg 8 kg
Z at $6 per kg 5 kg 10 kg
Direct labour:
Unskilled at $6 per hour 10 hours 5 hours
Skilled at $10 per hour 6 hours 5 hours
Product A Product B per
per unit unit
Budgeted inventories (next year):
Opening 400 800
Closing 500 1,100
Material X Material Y Material Z
kg kg kg
Budgeted inventories (next year):
Opening 30,000 25,000 12,000
Closing 35,000 27,000 12,500
BA 2 - Budgeting. Quantia Learning
, 2
Budgeted sales for next year: product Aye 2,400 units; product Bee 3,200 units.
Prepare the following budgets for next year:
(a) production budget, in units.
(b) material usage budget, in kgs.
(c) material purchases budget, in kgs and $.
(d) direct labour budget, in hours and $.
02. An ice cream manufacturer is in the process of preparing budgets for the next few months,
and the following draft figures are available:
Sales forecast:
June 6,000 cases
July 7,500 cases
August 8,500 cases
September 7,000 cases
October 6,500 cases
Each case uses 2.5 kg of ingredients and it is policy to have inventories of ingredients at the
end of each month to cover 50% of next month’s production.
There are 600 cases of finished ice cream in inventory on 1 June and it is policy to have
inventories at the end of each month to cover 10% of the next month’s sales.
Required:
(a) The production budget (in cases) for June and July will be:
June: _________ cases
July: _________ cases
(b) The ingredient purchases budget (in kg) for August will be _________ kg.
BA 2 - Budgeting. Quantia Learning
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