Reference no: EM133185287
Question - A company manufactures a single product, the Catrell, which requires just one material input called the Samet. Four 4 kilogrammes (kgs) of Samet is required to produce one unit of Catrell.
Each unit of the Catrell takes 1.5 hours of direct labour to produce.
Inventory held on 30 April was 5,000 finished Catrells, and 15,000 kgs of Samet.
The anticipated demand for the Catrell is as follows:
May 12,000 units
June 12,600 units
July 13,100 units with anticipated opening inventory (in July) of 15,720 kgs of Samet
It will be company policy to maintain raw material inventory at a level of 30% of the following month's usage, and to maintain finished goods inventory at a level to satisfy 50% of the following month's estimated sales.
Required - Calculate the following budgets for each of May and June:
1. Production of Catrell (in units)
2. Materials Usage of Samet (in kgs)
3. Materials Purchase of Samet (in kgs)
4. Direct Labour (in hours)
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