QUESTION 1 Dual Products Ltd has prepared the following four month sales budget, in units, for its two products Tee and Pee. April May June July Product Tee Product Pee 500 400 600 650 550 200 250 350 The direct material costs per unit of product are as follows: Material A Material B Product Tee 4kg @ 4 per kg 8kg @ 5 per kg Product Pee 12kg @ 4 per kg 16kg @ 5 per kg Production during each month is budgeted at a level to ensure that finished goods at the end of each month are equal to 10% of the next month's budgeted sales. Raw materials are purchased on a regular basis, as required for production during each month and to ensure that closing stocks are equal to 25% of the next month's production requirements. REQUIRED (a) Prepare for the month of May only (i) The production budget (in units) for each of the products Tee and Pee (ii) The purchases budget (in kg's and 's) for each of the materials A and B. (b) Briefly explain the principles of a just-in-time approach to stock management. (3 marks) (13 marks) (4 marks) (Total 20 marks)