Q1- A manufacturer produces two products of Alpha and Beta. The sales forecast for next year is as follows:

Product

Units

Alpha

60,000

Beta

40,000

The following materials are used to produce each product:

Amount used per unit

Direct material

Alpha

Beta

A

4 kilograms

5 kilograms

B

2 kilograms

3 kilograms

C

-

1 unit

The expected inventories are as follows:

Product

Expected 1 January

Desired 31 December

Alpha

20,000

25,000

Beta

8,000

9,000

Raw material

Expected inventories 1 January

Desired inventories 31 December

A

31,429 kilograms

36,000 kilograms

B

29,000 kilograms

32,000 kilograms

C

6,000 units

7,000 units

What is the direct material purchase requirement for raw material A?

Q2- A consultancy firm has two types of clients, small and large. 63% of clients are small.

Historical patterns of billing receipts are presented as follows:

Small clients

Large clients

During month of service

20%

10%

During month following service

50%

40%

During second month following service

20%

40%

Uncollectable

10%

10%

Sales forecast in the second half of the year is as follows:

Month

Estimated amount

July

$4,500,000

August

5,000,000

September

5,500,000

October

5,700,000

November

5,800,000

December

5,500,000

What is the expected amount of cash received in December?