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27 - A product manager (Budgeted P/L B/S) A product manager has responsibility for a...

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Accounting

27 - A product manager (Budgeted P/L B/S) A product manager has responsibility for a single product and is in the process of submitting data to be compiled into budgets for 2007. The manager has performance targets set in relation to sales volume, profitability levels and a target cash surplus from the product. Shown below are the agreed budgeted sales for the product for December 2006 to May 2007 DecJanFebMarAprilMay Units14,00016,00022,00017,00020,00024,000 The company policy is that, at each month end, the closing stock of finished goods should be 25% of the following months forecast sales and the stock of raw materials should be sufficient for 10% of the following month's production. Stock levels currently conform to this policy. One unit of raw material makes one unit of finished stock, there is no wastage

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