c) Material purchases budgets for each material (kg and $): This budget will calculate the amount of each chemical that needs to be purchased for production, as well as the cost of purchasing these materials.
d) Labour budgets (hours and $): This budget will calculate the total number of labor hours required for production, as well as the cost of labor based on the increased rate.
Explanation for c) Material purchases budgets for each material (kg and $):
To calculate the material purchases budget for each chemical, we need to consider the following factors:
1. Usage per unit: The requirement per unit of WWW for each chemical is given as follows:
- Chemical AAA: 3kg
- Chemical BBB: 1kg
- Chemical CCC: 2kg
2. Sales units: The sales units for each month are given as follows:
- January: 30 units
- February: 40 units
- March: 50 units
3. Closing stock policy: The company aims to hold closing stock of WWW equal to 50% of the next month's sales. Therefore, the closing stock for each month will be:
- January: 50% of February sales (50% of 40 units)
- February: 50% of March sales (50% of 50 units)
- March: 50% of April sales (50% of 60 units)
4. Raw material stock policy: The raw material stock at the end of each month is maintained at 20% of the following month's usage. Therefore, the raw material stock for each month will be:
- January: 20% of February usage (20% of (30 units * 3kg))
- February: 20% of March usage (20% of (40 units * 3kg))
- March: 20% of April usage (20% of (50 units * 3kg))
5. Price increase: The prices of raw materials are expected to increase by 10%.
Using these factors, we can calculate the material purchases budget for each chemical in terms of kilograms and dollars.