R Ltd. manufactures three products, A, B and C. The following information is given below.

Sales Forecast

Product   Quantity    Price Per Unit

A              1000            Rs.100

B               2000           Rs.120

C               1500            Rs.140

Materials Used in Company’s Products Are:

Material M1 Rs.4 per unit

Quantities used in Product

Product     M1      M2         M3

A                 4           2          –

B                 3          3           2

C                 2           1            1

Finished Stocks:

Product                                  A       B        C

Opening Inventory- units 1000 1500   500

Closing Inventory- units   1100 1650 550

Material Stocks:

Particulars                       M1      M2         M3

Opening Stock [Units] 26000 20000 12000

Closing Stock [Units] 31200   24000   14400

Required:

(a) The materials usage budget for January 2008. (4 marks)

(b) The materials purchases budget for January 2008. (14 marks)

(c) Define the term “limiting budget factor”. (1 mark)

Answer rating: 100% (QA)

Answer a The materials usage budget for January 2008 To calculate the materials usage for each produ... View the full answer