A company produces two products, A1 and A2 that are sold to retailers. The budgeted sales volumes for the next quarter are as follows:

The inventory of finished goods is budgeted to increase by 1000 units of A1 and decrease by 2000 units of A2 by the end of the quarter.

Materials B3 and B4 are used in the production of both products. The quantities required of each material to produce one unit of the finished product and the purchase prices are shown in the table below:

The company plans to hold inventory of raw materials, at the end of the quarter, of 5 per cent of the quarter’s material usage budget.
Required:
Prepare the following budgets for the quarter:
(i) The production budget (in units)
(ii) The material usage budget (in kg)
(iii) The material purchases budget (in kg and $)
(5 marks)
CIMA P17 Performance Operations

Transcribed Image Text:

Product A1 2 A2 Units 32 000 56.000