MAC June 2010

Marga

Right so i started looking at this paper

Data provided:

Demand forecast
• The sales demand is 3,000 for July, 3,400 for August and 2,000 for September.
• Demand reduces at the end of September and the sales for October to the following March are 500 each month.

Production and stock
• The company operates a five day week for production.
• The opening stock of finished jumping mats was 750.
• Policy is to have closing stock levels at the end of the month equivalent to 25% of the following month’s sales forecast.


Required to prepare the production budget for the three months

The answer given is

a) Production budget, in mats July August September
Sales (mats) 3,000 3,400 2,000
Add closing stock (mats) 850 500 125
Less opening stock (mats) 850 500
Production requirement (mats) 3,100 3,050 1,625

My point is: as it says that the opening stock of finished jumping mats was 750, dont we add this figure to the Less opening stock of July? obviously this figure is needed to get to the production requirement of 3,000 mats

or because it has been already produced before we prepared the table does need to be included into the calculations but not showing on the table?

Will it be ok if we show it on the table?

Thanks

A-Vic

Because its been used in the calculation i think its important to add it seems strange they didnt

Marga

A-Vic wrote: »

Because its been used in the calculation i think its important to add it seems strange they didnt

thanks A-Vic thats what i had in mind to show it in the table

A-Vic

odd thing also on all the others they have included it maybe it was a slight error

Marga

ok so i just gone up to the following question ...i think the answers are wrong again? what are the odds?


Trampoline Springs division
• Your colleague has calculated the production requirement for springs as follows:
Month July August September
Springs production requirement 297,600 292,800 156,000
• Each finished spring weighs 300 grams. Production losses are 20% of input to the manufacturing
process.
• The cost of steel is £2 per kilogram.

Prepare the following information for each of the months of July, August and September (d) spring materials requirement budget in kilograms and £

Answer

d) Materials requirement budget springs
Month
Springs production requirement 297,600 292,800 156,000
Weight of steel per spring (grams) 300 300 300
Total net weight of steel in kgs 89,280 87,840 46,800
Total gross weight of steel in kgs 111,600 109,800 58,500
Purchases cost of steel (£) 223,200 219,600 117,000


I cannot figure out how the total gross weight of steel in Kgs is coming from

i know there is a wastage of 20% but even adding 20% of waste to the production requirement of net weight i dont come up to this!

A-Vic

i hope your not asking me remember thats the paper i failed lolol - but ive printed it and having another go this weekend if you can hold off

Rinske

Hi Marga,

Based on your figures:

The Net weight needed is 89,280 for July. 20% of the input is wasted, so the 89,280 is the remaining 80%.

To get to the input you divide the 89,280 by 80 times 100 or easier just divide it by 0.80, which is 111,600.

Does this help at all?

Marga

Rinske wrote: »

Hi Marga,

Based on your figures:

The Net weight needed is 89,280 for July. 20% of the input is wasted, so the 89,280 is the remaining 80%.

To get to the input you divide the 89,280 by 80 times 100 or easier just divide it by 0.80, which is 111,600.

Does this help at all?

Hi Rinske

THAT makes sense

so basically i need to find out the 100% input , and what is given to me is the production less the wastage ...

89,280

---

> 80%
x

---

> 100%

therefore x = (100 * 89,280)/80 = 111,600


GOT IT!!!