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A company produces two (2) products, nature valle and oatmeal bar. The following sales forecast...

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Accounting

A company produces two (2) products, nature valle and oatmeal bar. The following sales forecast for both products was decided on for the first quarter of 2021:

Details January February March Total
Nature Valle 5,500 5,200 6,500 17,200
Oatmeal bar 4,500 4,600 4,800 13,900

Notes:

(a) The company planned to sell one unit of nature valle for $450 and one unit of oatmeal bar for $350 during the first quarter of 2021.

(b) The sales forecast for April 2021 is 5,900 units of nature valle and 4,000 units of oatmeal bar.

(c) The closing stock level for both products at the end of each period is to be held at a level equal to twenty percent (20%) of the budgeted sales for the next period.

(d) At the start of 2021 there were in stock 1,200 units of nature valle and 950 units of oatmeal bar.

(e) To make one unit of nature valle four (4) units of raw material barley are required, while six (6) units of raw material oats are required to make one unit of oatmeal bar.

Required:

(a) The sales budget for both products for January to March 2021. (5 marks)

(b) The production budget for both products for January to March 2021. (12 marks)

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