Care Manufacturers produces two products; Pureline and Furline. Both products use raw material fluoride and glycerol. Each unit of Pureline uses three (3) grams of fluoride and five (5) litres of glycerol. Each unit of Furline uses two (2) grams of fluoride and four (4) litres of glycerol. Each gram of fluoride is expected to cost $20 and a litre of glycerol $25. Sales and finished goods inventory budget for the year 2020 are as follows: Pureline Furline Budgeted Sales 20,000 units Budgeted Sales 16,000 units Opening Inventory 3,500 units Opening Inventory 2,500 units Closing Inventory 2,000 units Closing Inventory 1,500 units Selling Price $350 Selling Price $300 As at January 1, 2020, opening inventories of raw material are 800 grams of fluoride and 1,000 litres of glycerol. At the end of 2020, the company plans to hold 2,000 grams of fluoride and 1,800 litres of glycerol. The warehouse and stores managers have suggested that a provision should be made for damages and deterioration of items held in store, as follows. Products Pureline Loss of 60 units Furline Loss of 70 units Raw Materials Fluoride Loss of 210 grams Glycerol Loss of 120 liters Required: Prepare the following budgets both products for the year 2020: a)Sales b) Production budget c) Raw material usage budget
Care Manufacturers produces two products; Pureline and Furline. Both products use raw material fluoride and glycerol. Each unit of Pureline uses three (3) grams of fluoride and five (5) litres of glycerol. Each unit of Furline uses two (2) grams of fluoride and four (4) litres of glycerol. Each gram of fluoride is expected to cost $20 and a litre of glycerol $25.
Sales and finished goods inventory budget for the year 2020 are as follows:
|
Pureline |
Furline |
||||
|
Budgeted Sales |
20,000 |
units |
Budgeted Sales |
16,000 |
units |
|
Opening Inventory |
3,500 |
units |
Opening Inventory |
2,500 |
units |
|
Closing Inventory |
2,000 |
units |
Closing Inventory |
1,500 |
units |
|
Selling Price |
$350 |
|
Selling Price |
$300 |
|
As at January 1, 2020, opening inventories of raw material are 800 grams of fluoride and 1,000 litres of glycerol. At the end of 2020, the company plans to hold 2,000 grams of fluoride and 1,800 litres of glycerol. The warehouse and stores managers have suggested that a provision should be made for damages and deterioration of items held in store, as follows.
|
Products |
|
|
Pureline |
Loss of 60 units |
|
Furline |
Loss of 70 units |
|
Raw Materials |
|
|
Fluoride |
Loss of 210 grams |
|
Glycerol |
Loss of 120 liters |
Required:
Prepare the following budgets both products for the year 2020:
a)Sales
b) Production budget
c) Raw material usage budget
Step by step
Solved in 4 steps with 4 images
