Question:
A company manufactures three products, namely, A, B and C. The current pattern of sales of A, B and C is in the ratio of 8:2:1 respectively. The relevant data are as follows:
|
Products
|
A
|
B
|
c
|
|
Selling Price per unit (Rs.)
|
130
|
230
|
417
|
|
Raw Materials per unit (kg)
|
0.50
|
1.2
|
2.5
|
|
Direct Materials per unit (kg)
|
0.25
|
-
|
-
|
|
Skilled Labour hours /unit
|
4
|
6
|
8
|
|
Semi-skilled Labour hours per unit
|
2
|
2
|
3
|
|
Variable Overheads (Rs. per unit)
|
20
|
40
|
80
|
The price of raw materials and direct materials, respectively, are Rs. 100 and Rs. 40 per kg. The wage rates of skilled and semi-skilled labour, respectively, are Rs. 6 and Rs. 5. Each operator works for 8 hours a day for 25 days in a month.
The positions of inventories are as follows:
|
Openi
|
Raw
Materials kg
|
Direct
Materials kg
|
A units
|
B units
|
C units
|
|
Opening
|
600
|
400
|
400
|
100
|
50
|
|
Closing
|
650
|
260
|
200
|
300
|
50
|
The fixed overheads amount to Rs. 2,00,000 per month and the company desires a profit of Rs. 1,20,000 per month. You are required to prepare the following for a month:
1.Sales Budget in quantity and value.
2.Production Budget showing the quantity to be manufactured.
3.Purchase Budget showing the quantity and value.
4.Direct Labour Budget showing the number of workers and wages.