Page 307 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 307
Budgeting
Test your understanding 2
An ice cream manufacturer is in the process of preparing budgets for the next
few months, and the following draft figures are available.
Sales forecast
June 6,000 cases
July 7,500 cases
August 8,500 cases
September 7,000 cases
October 6,500 cases
Each case uses 2.5 kg of ingredients and it is policy to have inventories of
ingredients at the end of each month to cover 50% of next month’s
production.
There are 600 cases of finished ice cream in inventory on 1 June and it is
policy to have inventories at the end of each month to cover 10% of the next
month’s sales.
(a) The production budget (in cases) for June and July will be:
June cases
July cases
(b) The ingredient purchases budget (in kg) for August will be kg
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