Fast Food Product Ltd. has prepared the following Sales Budget for the first five months of 2009.

2009 Sales Budget (in Units)

January 10,800 February 15,600 March 12,200 April 10,400 May 9,800 The inventory of finished product at the end of every month is to be equal to 25 per cent of sales estimate for the next month. On 1st January, 2009, there were 2,700 units of product on hand. There is no work-in-progress at the end of any month.

Every unit of product requires two types of materials in the following quantities:

Material A 4 units Material B 5 units Material equal to one-half of the next month’s production are to be on hand at the end of every month. This requirement was met on 1st January 2009.

Prepare a material Budget for the first quarter of 2009 in a logical form showing the quantities of each type of material to be purchased.

[Ans.: Material A =1,50,500 units; Material B =1,88,125 units]