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A company manufactures a single product, the Fordrash, which requires just one material input of Material X. 3 kilogrammes (kgs) of X is required to
A company manufactures a single product, the Fordrash, which requires just one material input of Material X. 3 kilogrammes (kgs) of X is required to produce one unit of Fordrash Each unit of the Fordrash takes 2.5 hours of direct labour to produce. Inventory held on 30 April was 4,000 finished units of Fordrash, and 7,500 kgs of X The anticipated demand for the Fordrash is as follows: MayJuneJuly14,000units13,500units13,200unitswithanticipatedopeninginventory(inJuly)of7,920kgsofX It will be company policy to maintain raw material inventory at a level of 20% of the following month's usage, and to maintain finished goods inventory at a level to satisfy 40% of the following month's estimated sales. Required: Calculate the following budgets for each of May and June: a) Production of Fordrash (in units) b) Materials Usage of X (in kgs) c) Materials Purchase of X (in kgs) d) Direct Labour (in hours)
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