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Product Omega and the Western Company

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QUESTION 1.
Each unit of Product Omega requires 3 kgs of raw material. Next month's production budget for product Omega is as follows:

Opening stocks:
Raw materials 15,000 kgs.
Finished units of Omega 3,000 units
Budgeted sales of Omega 60,000 units

Planned closing stocks
Raw materials 7,000 kgs.
Finished units of Omega 4,000 units

Calculate the number of kilograms of raw materials that should be purchased next month.

QUESTION 2.
The Western Company manufactures and sells two products, Arrows and Spears. In October 2008 the Company's budget department gathered the following data in order to project sales and budget requirements for 2009.

Please see the attached document for the data.

Based on the above, prepare the following budgets for 2009:
(i) Sales budget (in £)
(ii) Production budget (in units)
(iii) Raw materials purchase budget (in quantities)
(iv) Raw materials purchase budget (in £)
(v) Direct labour budget (in £)
(vi) Budgeted finished goods inventory at Dec. 31, 2009 (in £)

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Product Omega and the Western Company is examined.

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