Reference no: EM133149268
Question - Medical Essentials anticipate the following sales forecast for the months indicated.
The company provides two products Antibiotics and Vaccines.
Sales Forecast 2014
Details Antibiotic Vaccine
February 5,800 units 6,400 units
March 8,700 units 5,500 units
April 6,275 units 7,000 units
May 7,300 units 5,600 units
June 8,500 units 4,250 units
July 6,400 units 6,700 units
Notes:
I. One Antibiotic requires two (2) units of raw material fungi. One unit of fungi costs $8. Vaccines use four (4) units of raw material protein which costs $12 each.
II. The company has decided that raw material stocks at the end of each month should be held equivalent to twenty percent (20%) of the budgeted sales for the next month.
III. During the year, the company charged $6,000 per antibiotic and $4,000 per vaccine.
IV. The decision was made that at the end of each month there should be in store sufficient finished goods stock to meet ten percent (10%) of the sales for the previous month.
V. Inventory managers estimate a monthly spoilage of 25 units of antibiotics and 30 units of vaccines and a monthly deterioration of 15 units of fungi and 20 units of protein. They have suggested that a provision should be made for these items' damages and deterioration in store.
Required -
a) Prepare the company's sale budget for the period April to June 2014.
b) Prepare the production budget for both products for the period April to June 2014.
c) Prepare the direct raw materials usage budget for the period April to June 2014.
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