During December of 2009 Native Foods Ltd. formulated its 2010 sales forecast for products local Star apple and Naseberry as follows: Details November 2009 December 2009 January February March April May Sales forecast Star apple 4,500 6,000 5,500 6,200 5,000 4,900 6,400 Naseberry 2,800 3,700 4,000 4,500 5,200 5,400 4,800 Notes: a) The company planned to sell one Star apple for $35 and one Naseberry for $20 during 2010 b) The closing stock level for both products at the end of each quarter is to be held at a level equal to ten percent (10%) of the budgeted sales for the preceding quarter. c) The warehouse and stores managers estimate a monthly spoilage of 20 Star apples and 15 Naseberries and a monthly deterioration of 10 units of phosphate and 30 units of potassium. They have suggested that a provision should be made for these items' damages and deterioration in store. d) To produce one Star apple units (2) units of phosphate are required, while four (4) units of potassium are required to produce one Naseberry. e) The cost of one unit of phosphate is $40, while the cost of one unit of potassium is $50. f) Closing raw material stocks in units in store at the end of each quarter is to be equivalent to twenty percent (20%) of the forecasted sales for the next quarter. Required: For the period, January 2010 to April 2010 do the following: a) The sales budget for both products for 2010. b) The production budget for both products for 2010. c) The direct raw materials usage budget for both products for 2010. d) The direct raw materials purchases budget for both products for 2010. (20 marks) (70 marks) (20 marks) (90 marks) During December of 2009 Native Foods Ltd. formulated its 2010 sales forecast for products local Star apple and Naseberry as follows: Details November 2009 December 2009 January February March April May Sales forecast Star apple 4,500 6,000 5,500 6,200 5,000 4,900 6,400 Naseberry 2,800 3,700 4,000 4,500 5,200 5,400 4,800 Notes: a) The company planned to sell one Star apple for $35 and one Naseberry for $20 during 2010 b) The closing stock level for both products at the end of each quarter is to be held at a level equal to ten percent (10%) of the budgeted sales for the preceding quarter. c) The warehouse and stores managers estimate a monthly spoilage of 20 Star apples and 15 Naseberries and a monthly deterioration of 10 units of phosphate and 30 units of potassium. They have suggested that a provision should be made for these items' damages and deterioration in store. d) To produce one Star apple units (2) units of phosphate are required, while four (4) units of potassium are required to produce one Naseberry. e) The cost of one unit of phosphate is $40, while the cost of one unit of potassium is $50. f) Closing raw material stocks in units in store at the end of each quarter is to be equivalent to twenty percent (20%) of the forecasted sales for the next quarter. Required: For the period, January 2010 to April 2010 do the following: a) The sales budget for both products for 2010. b) The production budget for both products for 2010. c) The direct raw materials usage budget for both products for 2010. d) The direct raw materials purchases budget for both products for 2010. (20 marks) (70 marks) (20 marks) (90 marks)
