The sales team at Joel Brown Manufacturing Company Ltd decided on the following sales forecast for the months indicated. The company produces two products that are called Clam and Glam. Sales Forecast 2016 Details Clam Glam July 3,000 units 4,000 units August 3,500 units 4,500 units September 4,000 units 3,800 units October 2,800 units 3,200 units November 3,400 units 3,000 units December 4,400 units 4,200 units Notes: (i) To make one unit of Clam three (3) units of raw material Z508 is used. One unit of Z508 costs $80. Glam uses two (2) units of raw material K500 which costs $60 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 month in question. (iii) During the year, the company sold one unit of Clam for $320, while one unit of Glam was sold for $340. (iv) The decision was made that at the end of each month there should be in store sufficient finished goods stock to meet thirty percent (30%) of the sales for the next month. Required: a. Prepare the following budgets for the months of August to November: i. Sales Budget ii. Production budget iii. Raw material usage budget

Name: The sales team at Joel Brown Manufacturing Company Ltd decided on the
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Description: The sales team at Joel Brown Manufacturing Company Ltd decided on the following sales forecast for the months indicated. The company produces two products that are called Clam and Glam. Sales Forecas

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The sales team at Joel Brown Manufacturing Company Ltd decided on the following sales forecast for the months indicated. The company produces two products that are called Clam and Glam.

Sales Forecast 2016

Details	Clam	Glam
July	3,000 units	4,000 units
August	3,500 units	4,500 units
September	4,000 units	3,800 units
October	2,800 units	3,200 units
November	3,400 units	3,000 units
December	4,400 units	4,200 units

Notes:

(i) To make one unit of Clam three (3) units of raw material Z508 is used.
One unit of Z508 costs $80. Glam uses two (2) units of raw material K500 which costs $60 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 month in question.

(iii) During the year, the company sold one unit of Clam for $320, while one unit of Glam was sold for $340.

(iv) The decision was made that at the end of each month there should be in store sufficient finished goods stock to meet thirty percent (30%) of the sales for the next month.

Required:

a. Prepare the following budgets for the months of August to November:

i. Sales Budget

ii. Production budget

iii. Raw material usage budget

iv. Raw material purchases

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