Problem:
A company manufactures two products, X and Y. A forecast of units to be sold in the first four months of the year is given below.
|
Particulars
|
Product X [units]
|
Product Y [units]
|
|
January
|
1, 000
|
2, 800
|
|
February
|
1, 200
|
2, 800
|
|
March
|
1, 600
|
2, 400
|
|
April
|
2, 000
|
2, 000
|
|
May
|
2, 400
|
1, 600
|
Other information is given below.
|
Particulars
|
Product X &
Rs. Per Unit
|
Product Y- Rs. Per Unit
|
|
Direct material
|
12.50
|
19.00
|
|
Direct labor
|
4.50
|
7.00
|
|
Factory overheads per unit
|
3.00
|
4.00
|
There will be no opening and closing work in progress [WIP] at the end of any month and finished product [in units] equal to half of the budgeted sale of the next month should be in stock at the end of each month. [including previous year December]
You are required to prepare,
A] Production budget for January to April and
B] Summarized production cost budget.