M Industries produces television antennas and has estimated sales for six models over the next six months. They provided raw material requirements and beginning and ending inventory estimates to prepare a production budget and calculate raw material purchase requirements. The production budget showed the units needed for each model based on sales, ending inventory, and opening inventory. This was used to calculate the pounds of raw materials X and Y needed for each model. The totals for X and Y needed for all production were summed. The raw material purchase budget was calculated by taking the total materials needed for production, adding the ending inventory, and subtracting the beginning inventory.
2. QUESTION NO 03:
M industries produces television antennas and has estimated sales
for the next six month period as follows:
Raw material requirements for each model are :
Model Number Units
1001 200
1002 150
1003 425
2001 175
2002 325
2003 215
Raw material in pounds
Model Number X Y
1001 5 2
1002 7 2
1003 10 3
2001 4 1.5
2002 6 2
2003 8 2.5
3. Estimated inventories are
Beginning Ending
Raw materials
X 5,000 lbs 7,000 lbs
Y 2,000 lbs 1,500 lbs
Finished goods
1001 50 units 40 units
1002 25 25
1003 75 60
2001 15 20
2002 35 35
2003 20 20
4. Required:
Prepare a production budget, by product.
Compute raw materials purchase requirement, by raw material.
6. MATERIAL REQUIRED FOR X AND Y
MODEL 1001:
190 X*5= 950
190 Y*2= 380
MODEL 1002:
150 X*7 =1050
150 Y*2= 300
MODEL 1003:
410 X*10= 4100
410 Y*3= 1230
7. MODEL 2001:
180 X*4= 720
180 Y*1.5= 270
MODEL2001:
325 X*6= 1950
325 Y*2= 650
MODEL 2003
215 X*8= 1720
215 Y*2.5= 537.5
Total X and Y:
X=10490
Y=3367.5
8. MATERIAL PURCHASED BUDGET
X Y
Required for production 10490 3367.5
+Ending raw material 7000 1500
- Beginning raw material (5000) (2000)
Material purchased 12490 2867.5
