e

In this chapter we have provided a very brief summary of the process for selecting alternative strategies. A detailed explanation of strategy formulation can be found in the corporate strategy literature. Predominant texts on this area include Johnson and Scholes (1999) and Thompson (1997). For a more detailed discussion of budget- ing in the public sector see Pendlebury (1996). n35 R Limited manufactures three products A, B and C. You are required: (a) Using the information given below, to prepare budgets for the month of January for (1) sales in quantity and value, including total value; (ii) production quantities; (iii) material usage in quantities; (iv) material purchases in quantity and value, including total value; (Note that particular attention should be paid to your layout of the budgets.) (b) To explain the term 'principal budget factor' and state what it was assumed to be in (a). Product Quantity Price each (units) () Sales: A B 1000 2000 1500 100 120 140 Materials used in the company's products: Material Unit cost MI 4 M2 6 M3 9 Quantities used in: Mi (units) M2 (units) M3 (units) Product A Product B Product C 4 3 2 2 3 1 1 Finished stocks: Product A (units) Product B (units) Product C (units) Quantities 1st January 31st January 1000 1100 1500 1650 500 550 Material stocks: MI (units) 26000 31 200 M2 (units) 20 000 24 000 M3 (units) 12 000 14400 1st January 31st January