Present the following for the next year, quarter wise: · Production budget in units · Raw material usage budget in quantity · Raw material purchase budget in quantity and value

A single product company estimated its sales for the next year quarter wise as under:

Quarter Sales units

1 30000

2 37500

3 41250

4 45000

The opening stock of finished goods is 10000 units and the company expects to maintain the closing stock of finished goods at 16250 units at the end of the year. The production pattern in each quarter is based on 80% sales of the current quarter and 20% of the sales of the next quarter.

The opening stock of raw material in the beginning of the year is 10000 kg and the closing stock of the raw material is required to be maintained at 5000 kg. Each units of finished output requires 2 kg of raw material.

 

The company proposes to purchase the entire annual requirement of raw material in the first three quarters in the proportion and the prices given below:

Quarter Purchase of raw material % to total annual requirement in quantity Price per kg in Rs.
1

30%

2

2

50%

3

3

20%

4

The value of the opening stock of raw material in the beginning of the year is Rs.20000.

Required: Present the following for the next year, quarter wise:

· Production budget in units

· Raw material usage budget in quantity

· Raw material purchase budget in quantity and value

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