PCR section 1 questions from June 06 and Dec 07

SandyHood

Hi Sandy

I am hoping you can help me with a query with these two papers section 1.

I do not understand why the material purchases budgets have been set out in two different ways. I had June 06 for home work and did the material puchases budget and totalled both products together to get an overall total and then worked out the wastage. Whereas I did the Dec 07 paper today in class and totalled both together for the material purchases and worked out the wastage, but it was completely wrong and was told to keep the two products seperate.

This is really frustrating me as I don't know when to add both together and when to keep the figures sperate. Can you help?

Dear enquirer

I may well surprise you by saying, I agree with your approach!!
I don't think you are wrong at all

Dec 07, for the benefit of other forumites was the paper where:

You are employed as an Accounting Technician by Kartons Ltd.
The company makes packaging for the drinks industry. It makes two products, a 250ml carton and a 500ml carton. Both cartons use the same types of material and labour but in different quantities.

And just in case you think my enquirer has got the exam papers the wrong way round, here is the start of the June 06 paper

You work for Nutpin Ltd as a management accountant. The company makes two products, the Sigma and the Theta, that are sold to the communications industry. Both products use the same type of materials and labour but in different quantities.

So be in no doubt whatsoever.
If we need the total materials needed in each scenario we must find:

1. Production in units for each product
2. mutiply by the kgs/metres/litres required per unit (separately)
3. take the total kgs of good raw material needed for production for each
4. adjust for any wastage of raw material
5. add together the total raw material needed for each product to find a total material requirement
6. add any closing stock of raw material needed
7. deduct any opening stock
8. to find the amount of raw material that should be purchased

SandyHood

On re-reading your question, I wonder when you adjusted for wastage.
My general approach has a possible difference in wastage between the products built-in.
There is a 2% wastage of raw material on both products in Dec 07 and the same in June 06, so you can short cut the calculations although I would still recommend sticking to the list of calculations I've given