Pcr - dec 2006

pink

Hi

Can any one help me with this past paper

on Task 1.2 in the answers, I cant see where they get the new Closing stock from of 8,200 units for Q1??

Just getting in some last minute practice!!

Thanks..

Mhmoud Thafer

Hi Pink

total amount of material available is £120 000 kgs

you can produce 60,000 unit as a Gross production
you have to workout the wastage of material in units which is 60,000 units x 3% =1800 units wastage
so to find the net production Budget that 60,000 units - 1800 units wastage = 58200 units as net production
you have to work it out backward
so the planned production is 58200 units takeaway the sales 50,000 units that gives you 8200 as a closing stock that is the balancing figure.

see the next period 2
planned production - sales + opening stock
= Closing stock (( BALANCING FIGURE))

58200 - 54000 + 8200 = 12400 UNITS CLOSING STOCK

I wish the info will help you.