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:
- Prepare a Production Budget showing month-wise number of units to be manufactured.
- Present a summarized Cost Budget for the half-year ending on 30 September 2009.