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Student Virtual Learn ACCA Global Website : BUDGETING

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Student Virtual Learn ACCA Global Website : BUDGETING

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • June 14, 2021 at 2:49 pm #625256
    weirdxnii
    Participant
    • Topics: 3
    • Replies: 3
    • ☆

    A company manufactures two products, X and Y, from the same direct material. An equal number of each product will be produced this period. Each unit of X requires 2 kg of material and each unit of Y requires 3 kg of material. The company always holds closing inventory of raw material sufficient for 40% of the next period’s production. The budgeted closing raw material inventory for the previous period is 900 kg.

    What is the budgeted production of X for the current period?
    The answer given was 450 units.

    I don’t understand… Why is it not 225 units? Isn’t 450 units the budgeted production for both X and Y?

    June 14, 2021 at 4:14 pm #625261
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54671
    • ☆☆☆☆☆

    The material for this period’s production will be 900/40% = 2,250 kg.

    It takes 5kg to produce 1 unit of each of X and of Y, and therefore they have enough kgs to produce 2,250/5 – 450 units of X and 450 units of Y.

    (Check it. To make 450 units of each will need (450 x 2) + (450 x 3) = 2,250 kgs).

    June 15, 2021 at 3:31 am #625301
    weirdxnii
    Participant
    • Topics: 3
    • Replies: 3
    • ☆

    Ooh.. I see, Thank you so much 🙂

    June 15, 2021 at 8:21 am #625312
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54671
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Student Virtual Learn ACCA Global Website : BUDGETING’ is closed to new replies.

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