For revision purpose only - Management Accounting

Question #1

Homemade Scented Manufacturers produces two products from their signature fresh scent candles; Citronella and Gardenia. Both products use raw material fragrance oil and dye. Each unit of Citronella uses three (3) grams of dye and five (5) litres of fragrance oil. Each unit of Gardenia uses two (2) grams of dye and four (4) litres of fragrance oil. Each gram of dye is expected to cost $12 and a litre of fragrance oil $16.

Sales and finished goods inventory budget for the year 2022 are as follows:

Citronella	Gardenia
Budgeted Sales	18,000	units	Budgeted Sales	16,000	units
Opening Inventory	3,500	units	Opening Inventory	2,500	units
Closing Inventory	1,800	units	Closing Inventory	1,500	units
Selling Price	$350		Selling Price	$320

As at January 1, 2022, opening inventories of raw material are 800 grams of dye and 1,000 litres of fragrance oil. At the end of 2022, the company plans to hold 2,000 grams of dye and 1,800 litres of fragrance oil.

The warehouse and stores managers have suggested that a provision should be made for damages and deterioration of items held in store, as follows.

Products
Citronella	Loss of 120 units
Gardenia	Loss of 80 units
Raw Materials
Dye	Loss of 200 grams
Fragrance oil	Loss of 120 liters

Required:

Prepare the following budgets both products for the year 2022 (Please prepare in excel format and state figures in 000,000,000 where applicable so I can follow easily):

1. Sales budget
2. Production budget
3. Raw material usage budget
4. Raw Materials purchases