Question

A company produces its main product called Vitamix using one material code named Voom. One unit of the product uses 2.3 litres of Voom. In a given period, the following budget data was provided: Opening stock Closing stock Vitamix (units) 28,300 35,900 Voom (litres) 26,180 22,740 The company’s purchases budget was 738,080 litres of Voom in the period. Required: Calculate the budget sales

Answer 1

To calculate the budget sales, calculate the total volume of Vitamix produced and the total volume of Voom used. The total production of Vitamix is 7,600 units and the total volume of Voom used is 17,480 liters. The budget sales of Voom is 741,520 liters.

Step-by-step explanation:

To calculate the budget sales, we need to calculate the total volume of Vitamix produced and the total volume of Voom used. In the given period, the opening stock of Vitamix was 28,300 units and the closing stock was 35,900 units. Therefore, the total production of Vitamix in the period was 35,900 - 28,300 = 7,600 units. Since each unit of Vitamix uses 2.3 liters of Voom, the total volume of Voom used in the period is 7,600 units * 2.3 liters/unit = 17,480 liters.

Finally, to calculate the budget sales, we subtract the closing stock of Voom (22,740 liters) from the opening stock of Voom (26,180 liters) and add the purchases budget (738,080 liters). Therefore, the budget sales of Voom in the period is 26,180 liters + 738,080 liters - 22,740 liters = 741,520 liters.

Answer 2

To calculate the budget sales, the total Voom available was determined and then the amount consumed was calculated. This led to figuring out the number of Vitamix units produced and finally the sales in units by adjusting for changes in inventory. It resulted in budget sales of 313,260 units of Vitamix.

Step-by-step explanation:

The question is focused on calculating the budget sales for a company's main product Vitamix, which is produced using a material named Voom. According to the provided budget data, we have an opening stock of Vitamix units and closing stock of Vitamix units, as well as opening and closing stock levels of Voom in litres, with a purchase budget for Voom during the period. To compute the budget sales, we need to first determine the quantity of Voom consumed and then relate this to the number of Vitamix units sold.

Step-by-Step Calculation

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Let's carry out these calculations:

Total Voom available = Opening stock + Purchases - Closing stock
= 26,180 litres + 738,080 litres - 22,740 litres
= 741,520 litres

Voom consumed = Total Voom available - Opening stock + Closing stock
= 741,520 litres - 26,180 litres + 22,740 litres
= 738,080 litres

Units of Vitamix produced = Voom consumed / 2.3 litres per unit
= 738,080 litres / 2.3 litres/unit
= 320,860 units (rounded to the nearest whole unit)

Budget sales in units = Units produced - Increase in inventory of Vitamix units
= 320,860 units - (Closing stock - Opening stock)
= 320,860 units - (35,900 units - 28,300 units)
= 313,260 units

Therefore, the company's budget sales for the period is 313,260 units of Vitamix.