Kerry-Blue Ltd is a company manufacturing two products using one type of material and one grade of labour. Shown below is an extract from the company's working papers for the next period's budget:

Product R 8 Budgeted sales (units) 3000 4500 Budgeted material consumption per product (Wg) 6 2 Budgeted material cost ( $3 per kg)

Standard hours allowed per product (hr) 5 5 The budgeted wage rate for the direct workers is $4 per hour for a 44-hour week, overtime premium is 50 per cent and there are 65 direct operatives. The target productivity ratio (or efficiency ratio) for the productive hours worked by the direct operatives in actually manufacturing the product is 90 per cent;

in addition, the amount of non-productive downtime is budgeted at 20 per cent of the productive hours worked.

There are 12 5-day weeks in the budget period, and it is anticipated that sales and production will occur evenly throughout the whole period. At the beginning of the period it is anticipated that the stocks will be:

Product K

B Raw material Units 1050 1200 3700kg The target closing stocks, expressed in terms of the anticipated activity during the budget period, are:
Product K B Raw material REQUIRED Days' sales 15 days 20 days 1 0 days' consumption

(a) Calculate the material purchase budget and the wage budget for the direct workers, showing both quantities and values for the next period

(b) Describe the additional information required in order to calculate the weekly cash disbursements for materials and wages during the above budget period ACCA. PE, Accounting 2 costing, June 1981.