A company manufactures two products, X & Y. It uses three materials in its manufacture, A, B and C and both unskilled and skilled labour are used. The standard costs for both products for next year are as follows:
Budgeted Sales for next year:
Product X 2,900 units;
Product Y 3,700 units.
Required
a) Prepare the following budgets for next year:
i) The production budget of both X and Y, in units ii) The material usage budgets, in kg
iii) The material purchases budget, in kg and £
iv) The direct labour budget, in hours and £
b) Describe and explain the main purposes of budgets.