CALCULATED IN DETAILED PLS

Moreton Ltd produce aftershave, although sales are good Moreton have had 2 bad debts recently and are concerned about their cash flow. The directors have asked you to prepare an updated budget for the first half of the year. The sales forecast for the next six months has been prepared by the sales director. She expects that July sales will also be 17000 units. Sales units January 16000 February 15000 March 14500 April 15500 May 17000 Dune |17000 The production director informs you that there are 2200 bottles currently in stock, company policy is to have a closing stock of 20% of next months sales. The standard level of waste on finished product is 5%, you are required to incorporate that into the production budget. a. Prepare a production budget for January to June. Raw Materials: Each unit requires 50ml of ESSO2. ESSO2 is bought in cartons of 10 litres and issued to production by cartons. There are five 10 litre cartons in stock. Moreton have a raw material policy which states that there must be a minimum of five 10 litre cartons in stock of ESSO2, there is no maximum limit set. The purchasing department raise purchase orders each month for the amount of cartons they budget will be issued to production. A carton of ESSO2 costs 580. b. Prepare a materials usage budget of ESSO2 for January to June. This should include the number of litres used and the cartons issued to production. c. Prepare a materials purchases budget of ESSO2 in cartons, litres and , for January to June. d. Use your figures to calculate the closing inventory of ESSO2 in litres Discuss Moreton's raw material policy