Question BugAway P/L produces and sells insect repellent. Information about the budget for the ye… Assignment Help


QuestionBugAway P/L produces and sells insect repellent. Informationabout the budget for the year 2015/2016 is as follows:• The company expects to sell 40,000 bottles of BugAway in thefirst quarter, 50,000 bottles in the second quarter, 93,000 in thethird quarter, and 36,000 in the fourth quarter• A bottle of BugAway requires 200 g of Chemical A and 300 g ofChemical B.• The desired ending inventory of finished product is equal to20 percent of the next quarter’s sales whereas the desired endinginventory for (raw) material is 15 percent of the next quarter’sproduction requirements.• At the end of the present quarter (Q4 2014/2015) it isexpected that there will be 11,000 bottles of BugAway, 1,900 kg ofChemical A and 2,900 kg of Chemical B on hand.• At the end of the budget fourth quarter, the company desiresto have 12,000 bottles of BugAway, 2,000 kg of Chemical A and 3,400kg of Chemical B• The cost of chemical A is $3.60 per kg, the cost of Chemical Bis $2.70 per kg, and the selling price of BugAway is $9.95 perbottle. It is expected that these figures will remain static overthe next twelve months.(a) Prepare a production budget for each quarter of2015/2016(b) Prepare a materials purchase budget for each quarterof 2015/2016

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