Question
A company produces its main product called Vitamix using one material code named Voom. One unit of the product uses 4.5 litres of Voom. The
A company produces its main product called Vitamix using one material code named Voom. One unit of the product uses 4.5 litres of Voom. The production process of Vitamix requires two grades of labour L1 and L2 in the ratio of 3 hours per unit and 2 hours per unit for L1 and L2 respectively. Labour is paid at a rate of ksh 140 per hour and ksh 200 per hour for L1 and L2 respectively. In a given period,
the following budget data was provided:
| Opening stock | Closing stock |
Vitamix (units) | 2,300 | 5,900 |
Voom (litres) | 8,180 | 12,710 |
The total labour cost budget for the company was ksh 39,360,000 of which ksh 19,200,000 is on labour grade L2.
Required:
Calculate the budgeted purchase quantity of Voom.
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