QUESTION ONE (GROUP ASSIGNMENT)
Mikanjuni Plc manufactures and sells two products Bing and Xing. The company is planning its budget for
the year ending on 31 December 2023. The following are the expectations for 2023:
1. Statement of Financial Position (SOFP) for the year ended 31st December 2022
Assets
TZS
TZS
Non-current assets
Building
60,000,000
Plant and machinery at cost
249,300,000
Less: Depreciation
100,000,000
149,300,000
Current assets
Inventory
41,765,000
Receivables
26,104,000
Cash
5,800,000
73,669,000
Total A ssets
282,969,000
Equity and liabilities
Caital and Reserves
Share capital (TZS 10,000 @)
200,000,000
Reserves and surplus
73,600,000
Current Liabilities
Payables
9,369,000
Total Equity and Liabilities
282,969,000
2. Finished Products
Bing
Budgeted sales (units)
Budgeted selling price per unit (TZS)
Finished Goods at 1 January 2022 (Units)
Finished Goods at 31 December 2022 (Units)
Unit cost of opening inventory
Xing
6,000
5,300
32,000
44,000
1,200
270
530
1,600
20
28
3. Production details
(i) Direct Material
X
Y
Bing
1.5kg
2kg
Xing
0.5kg
4kg
Opening inventory of raw material
1,470
8,000
Closing inventory of raw material
800
1,330
Budgeted cost per kg of material purchased (TZS.)
1500
1000
Material per unit of production
(ii) Direct labour
For the production of one unit of Bing and Xing, 2 and 3 direct labour hours are required respectively.
Labour is paid at TZS4,800 per hour.
(iii) Factory overheads:
The estimated factory overheads are TZS103,100,000 including TZS20,000,000 for depreciation. Th
factory overheads are absorbed on a direct labour hour basis.
(iv) The estimated selling and distribution overheads are TZS40,500,000 per annum.
(v) There is no opening and closing work-in-progress.
(vi) A capital expenditure on buildings estimated at TZS200,000,000 will be incurred in the third quarter of
the year.
(vii) Quarterly budgeted receipts and payments are as follows
Quarters
1
TZS
2
TZS
3
TZS
4
TZS
Payments
Payables
9,570,000
12,000,000
13,300,000
7,000,000
Staff salaries
44,000,000
47,320,000
35,320,000
20,000,000
Other Payments
13,300,000
53,189,000
250,380,000
6,731,000
Receipts against sales
93,300,000
133,700,000
133,700,000
53,400,000
REQUIRED:
Prepare the following budgets for the year ended 31 December 2023 for Mikanjuni Plc:
(a) Budgeted Income Statement
(b) Budgeted Statement of Financial Position