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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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  • July 16, 2024
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BA 2 - Fundamentals of Management Accounting



Practice 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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