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2 The new managing director has expressed concern about the performance of certain ranges, and has asked for further information to enable him to...

2 The new managing director has expressed concern about the performance of certain ranges, and has asked for further information to enable him to consider plans for the coming year. In particular he is concerned about 2 sets of casserole dishes known as the “Banquet” set and the “Party” set. He has asked for details about the products and you have obtained the following information:

Banquet £ Party £
Selling price per unit 150 60

Material costs per unit 50 20

Labour costs
- Cutting & shaping 2 hrs @£12.50/hr 25 1 hr @ £12.50/hr 12.50
- Assembly 1.5 hr @ £10 hr 15 1 hr @ £10/hr 10


Expected sales volumes for the first four months of the coming year are as follows:-

Month 1 Month 2 Month 3 Month 4
Banquet 100 120 130 130
Party 500 600 600 700

At the beginning of month 1 the company would have 75 ‘Banquet’ and 400 ‘Party’ sets in stock. The business intends to produce enough in month 1 so that closing stock will be 20% of the following month’s budgeted sales each month. This pattern of closing stock will continue for the foreseeable future.



Prepare the following budgets from the information provided for the first four months of the New Year

1 Sales Budget
2 Production Budget
3 Materials cost Budget


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2 The new managing director has expressed concern about the performance of certain ranges,
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particular...

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