Prepare a statement of budgeted costs for working

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Reference no: EM13540724

The following budget of PQ Ltd, a manufacturing organization, has been prepared for the year 2007-08.

Particulars

% of Sales Value

Raw Materials

40

Direct Wages

25

Factory Overheads - Variable

10

Factory Overheads - Fixed

5

Administration and Selling and Distribution
Overheads - Variable

6

Administration and Selling and Distribution
Overheads - Fixed

12

Profit

2

Sales Value

100

After considering the quarterly performance, it is felt that the budgeted volume of sales would not be achieved. But the company expects to achieve 80% of the budgeted sales [equivalent to sales value of Rs.160, 00, 000] At this stage; the company has received an export order for its usual line of products. The estimated prime cost and special export expenses for fulfilling the export order are Rs.13, 00, 000 and Rs.40, 000 respectively. You are required to,

1) Present the original budget and the revised budget based on 80% achievement of the target sales, showing the quantum of profit/loss

2) Prepare a statement of budgeted costs for working out the overhead recovery rates in percentages

3) Work out the lowest quotation for the export order.

Reference no: EM13540724

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