Question 6

The following sales information was extracted from the books of Sun Ltd during 2015. The company produces two products, Zinc and Tin.

Sales forecast January- April 2015

Details	January	February	March	April	Total
Zinc	2,000	1,800	2,200	2,500	8,500
Tin	1,500	1,700	1,900	2,200	7,300

Notes:

1. The ending stock of finished goods each month is to be held equal to 25% of the forecasted sales for the next month.
2. Raw material stocks at the end of each month are to be held at a level equal to twenty (20%) percent of the sales for that month. Sales for December 31, 2014 were Zinc 3,000 units; and Tin 2,600 units.
3. To make one unit of Zinc four (3) units of raw material X12 are used, while five (4) units of raw material Z100 are used to make one unit of Tin.
4. During 2015 the company sold one unit of Zinc for $650 and one unit of Tin for $875.
5. Budgeted sales for May 2015 were 2,400 units of Zinc and 2,000 units of Tin.
6. One unit of X12 was purchased for $40; while one unit of Z100 was bought for $22

Prepare the following budgets for the months of January 2015 to April 2015:

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