Question:
A company is drawing its production plan for the year 2009-10 in respect of two of its products 'Gamma' and 'Delta.' The company's policy is not to carry any closing WIP (work-in-progress) at the end of any month. However, its policy is to hold a Closing Stock of Finished Goods at 50% of the anticipated quantity of sales of the succeeding month. For the year 2009-10, the company's Budgeted Production is 20,000 units of 'Gamma' and 25,000 units of 'Delta.' The following is the estimated cost data:
|
Gamma Rs.
|
Delta Rs.
|
|
Direct Materials per unit
|
50
|
80
|
|
Direct Labour per unit
|
20
|
30
|
|
Other Manufacturing Expenses apportionable to each type of product, based on Production
|
2,00,000
|
3,75,000
|
The estimated units to be sold in the first 7 months of the year 2009-10 are as follows:
|
April
|
May
|
June
|
July
|
August
|
September
|
October
|
|
Gamma
|
900
|
1,100
|
1,400
|
1,800
|
2,200
|
2,200
|
1,800
|
|
Delta
|
2,900
|
2,900
|
2500
|
2,100
|
1,700
|
1,700
|
1,900
|
You are required to:
1.Prepare a Production Budget showing month-wise number of units to be manufactured.
2.Present a summarized Cost Budget for the half-year ending on 30 September 2009.