Question 3 A company is preparing production and purchasing budgets. One of the company's products (Product Z) has the following budgeted sales units: Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 8,000 8,500 9,000 8,000 6,000 6,500 Two raw materials (Materials X and Y) are used in the manufacture of Product Z. Each finished unit of the product requires 0.5 kg (at RM8.00 per kg) and 0.8 kg (at RM4.50 per kg) of Materials X and Y respectively. 2 Production is planned at a level to meet the sales expectations of the following month. Purchases of raw materials are planned so that the materials required for production in a certain month are purchased during the preceding month. Further planned adjustments are made to stock levels to reflect seasonal uncertainties in the market place. These further adjustments to stock levels, beyond those that would result from the above production and purchasing policies are Raw Materials Material X Material Y + 300 kg + 500 kg 300 kg 500 kg Finished Goods Product Z + 400 units - 400 units Month 2 Month 3 - Required: (a) Prepare the Production Budget (units of Product Z) for each of Months 3, 4 and 5. (b) Prepare the Materials Purchases Budget (kg of each of Materials X and Y) for each of Months 2, 3 and 4. (c) Calculate the total value (RM) of the Budgeted Materials Purchases in (b) above