The following information has been prepared for Tom Limited for the six months to 30 September 2016: 

Product X uses two units of component A6 and three units of component B9. On 1 April 2016 there were expected to be 100 units of A6 in stock, and 200 units of B9. The desired closing stock levels of each component were as follows:

During the six months to 30 September 2016, component A6 was expected to be purchased at a cost of £5 per unit, and component B9 at a cost of £10 per unit.

Required:

Prepare the following budgets for each of the six months to 30 September 2016:

(a) Direct materials usage budget;

(b) Direct materials purchase budget.

Transcribed Image Text:

April May June July August September Budgeted production levels for product X Units 140 280 700 380 300 240