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The company prepared the following budgeted information for the period April to June 2022: Product Ki (N$) Product Lo (N$) Selling price per unit 500

The company prepared the following budgeted information for the period April to June 2022:

Product Ki (N$)

Product Lo (N$)

Selling price per unit

500

700

Direct labour (N$30 per hour)

150

210

Direct material A (N$10 per kg)

80

120

Direct material B (N$15 per kg)

75

90

Variable overheads

50

60

Value of opening inventory

75 840

43 540

Product Ki

Product Lo

Opening inventory units

1 000

800

Closing inventory units

1 000

600

Budgeted production units

10 000

5 800

Additional information:

  1. The company total fixed costs are N$2 800 000 for the budget period.
  2. Inventory on hand at 31 March 2022 is 12 000 kg of material A and 6 000 kg of material B.
  3. Expected closing inventory on 30 June 2022 for both material A and B should be enough to produce 500 units of Product Ki and 400 units of Product Lo.
  4. At the budget presentation meeting, the following amendments to the budget were approved:
  • The selling price per unit must be increased by 20% for both products.
  • Raw material price per kg for both material A and B must be increased by 10%.

Required:

1. Calculate total value of raw material A needed to be bought to meet production requirement for product Ki & Lo.

2. Calculate the total kgs for material A & B required to meet production needs for product Ki and Lo.

3. Calculate total labour hours that will be needed to meet production requirements for product Ki & Lo.

4. Calculate the total budgeted sales revenue for product Ki & Lo.

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