S1 A clothing company makes ties and cravats using silk material. It wraps each item in packaging film. For the coming accounting period budgets are to be prepared based on the following information. Budgeted Material Packaging Sales In film in (number metres meters of items) 1000 0.4 0.25 500 0.5 0.3 Ties Cravats Opening inventory 100 250 Closing inventory 200 200 100 Ties 15 Cravats Standard cost per unit of raw material 10 a) How many metres of material and packaging film will the company need to purchase in the coming period? b) How much packaging film do they need to buy in the coming period? c) The total purchasing cost for the coming period. L1 Pommery Production and Raw materials budget Pommery specialises in the manufacture of dry cider. The management accountant has asked you to create a production budget. The opening stock is 80,000 litres in August and 20% of the month's sales for every month after that. She has given you the following sales information: Sales volume by month Litre August 400,000 September 340,000 October 300,000 November 260,000 December 320,000 January 250,000 15kg of apples are needed to produce 1 litre of cider and opening stock is planned to be 50% of each month's usage. Opening stock in August and closing stock in December are both planned to be 2,200 tonnes. The cost price of apples is 150/tonne in August, September and October but rises to 350/tonne in November as it has to be imported. Required: The management accountant has asked you to create a production budget in litres and a raw material purchasing budget in s and tonnes for the months August to December L2 Pommery Cashflow forecast You are given additional information to that provided in L1. Each 1 litre bottle of cider sells for 3.00. You are told that 25% of the sales revenue is received in cash and 75% is on credit, paid in the month after sales. You have calculated the raw material costs already and you can assume that all purchases are paid for one month after they are incurred. Wages are paid in the month they are incurred and are 0.2 per litre produced. Fixed overheads are 30,000 a month including 5,000 for depreciation. The opening cash balance in September is 50,000. Required: The management accountant has asked you to prepare a cash flow forecast for the months of September to December. Comment on the financial situation of the company