Answer Happy

QUESTION 5
Rover Ltd is a NEW business and is
expecting the following sales figures in the coming
months.
Units
September
October
November
December
January
Sales
2000
2200
2300
2500
2500
Each unit produced requires 2kg of raw
material.
The policy is to hold raw materials
inventory equivalent to 50% of the next month’s production and to
hold finished goods inventory equivalent to 30% of the next month’s
sales.
a) Compile the production budget
(in UNITS) for Rover Ltd for EACH of the three months, September to
November.
b) Compile the raw materials budget
(in KGs) for Rover Ltd for EACH of the three months, September to
November.
c) The sales manager has just been
told that one of the machines used for production will not be
useable in October, this will lead to a shortfall in production. It
will not be possible to purchase a new machine for 3 months.
Discuss TWO solutions you as manager would suggest along with their
pros and cons.
d) In January the production manager
has suggested buying a new machine, before this happens what
calculations could be done?
e) with reference to 5d) discuss which
method you would consider the best and why?