to explain the term principal budget factor 39 and state what it was assumed to be i 597786
R Limited manufactures three products A, B and C.
You are required:
(a) Using the information given below, to prepare budgets for the month of January for
(i) sales in quantity and value, including total value;
(ii) production quantities;
(iii) material usage in quantities;
(iv) material purchases in quantity and value, including total value;
(b) To explain the term `principal budget factor’ and state what it was assumed to be in (a).
|
Product |
Quantity |
Price each . |
|
|
(units) |
(£) |
||
|
Sales: |
A |
1000 |
100 |
|
B |
2000 |
120 |
|
|
C |
1500 |
140 |
|
|
Materials used in the company’s products: |
|||
|
Material |
M1 |
M2 |
M3 |
|
Unit cost |
£4 |
£6 |
£9 |
|
Quantities used in: |
M1 |
M2 |
M3 |
|
(units) |
(units) |
(units) |
|
|
Product A |
4 |
2 |
— |
|
Product B |
3 |
3 |
2 |
|
Product C |
2 |
1 |
1 |
|
Finished stocks: |
Product A |
Product B |
Product C |
|
(units) |
(units) |
(units) |
|
|
Quantities |
|||
|
1st January |
1000 |
1500 |
500 |
|
31st January |
1100 |
1650 |
550 |
|
Material stocks: |
M1 |
M2 |
M3 |
|
(units) |
(units) |
(units) |
|
|
1st January |
26000 |
20000 |
12000 |
|
31st January |
31200 |
24000 |
14400 |