Question
In: Accounting
TASK-4 Calculate the total quantity of materials required for a production process and the total funds required...
TASK-4 Calculate the total quantity of materials required for a production process and the total funds required to purchase the materials.
Mr. Fateh is the operations manager in an electrical equipment manufacturing company producing 3 different products. He needs to prepare a materials requirement plan for all THREE of his Products A, B & C, that is good for 6 months operation. Prepare an MRP chart for him and calculate the total budget (money) required for these materials. The BOM for each item is given under.
B.O.M (Bill of Materials)
|
Material |
Material for one unit of Product |
||||
|
Description |
Price (SR) |
Unit |
A |
B |
C |
|
Steel |
20 |
KG |
5 |
6 |
4 |
|
Glass |
10 |
SFT |
2 |
3 |
2 |
|
Plastic |
50 |
KG |
3 |
4 |
2 |
|
Electric Motor |
200 |
No |
1 |
2 |
3 |
|
Wires |
2 |
Meter |
10 |
12 |
8 |
|
Capacitor |
12 |
No |
5 |
8 |
6 |
|
Resistances |
3 |
No |
10 |
15 |
12 |
|
Screws |
0.02 |
No |
20 |
25 |
24 |
Monthly Demand for Item-A is 700 units, Item-B is 500 units and Item-C is 900 units. (Use the table format as shown in the slide show for MRP)
Solutions
Expert Solution
| Material Description | PRICE | UNIT | PRODUCT WISE - A | PRODUCT WISE - B | PRODUCT WISE - C | ||||||||||||
| 1 UNIT | 1M - 700 | 1M - Budget | 6M - 4200 | 6M - Budget | 1 UNIT | 1M - 500 | 1M - Budget | 6M - 3000 | 6M - Budget | 1 UNIT | 1M - 900 | 1M - Budget | 6M - 5400 | 6M - Budget | |||
| Steel | 20 | KG | 5 | 3,500 | 70,000 | 21,000 | 420,000 | 6 | 3,000 | 60,000 | 18,000 | 360,000 | 4 | 3,600 | 72,000 | 21,600 | 432,000 |
| Glass | 10 | SFT | 2 | 1,400 | 14,000 | 8,400 | 84,000 | 3 | 1,500 | 15,000 | 9,000 | 90,000 | 2 | 1,800 | 18,000 | 10,800 | 108,000 |
| Plastic | 50 | KG | 3 | 2,100 | 105,000 | 12,600 | 630,000 | 4 | 2,000 | 100,000 | 12,000 | 600,000 | 2 | 1,800 | 90,000 | 10,800 | 540,000 |
| Electric Motor | 200 | No | 1 | 700 | 140,000 | 4,200 | 840,000 | 2 | 1,000 | 200,000 | 6,000 | 1,200,000 | 3 | 2,700 | 540,000 | 16,200 | 3,240,000 |
| Wires | 2 | Meter | 10 | 7,000 | 14,000 | 42,000 | 84,000 | 12 | 6,000 | 12,000 | 36,000 | 72,000 | 18 | 16,200 | 32,400 | 97,200 | 194,400 |
| Capacitor | 12 | No | 5 | 3,500 | 42,000 | 21,000 | 252,000 | 8 | 4,000 | 48,000 | 24,000 | 288,000 | 6 | 5,400 | 64,800 | 32,400 | 388,800 |
| Resistances | 3 | No | 10 | 7,000 | 21,000 | 42,000 | 126,000 | 15 | 7,500 | 22,500 | 45,000 | 135,000 | 12 | 10,800 | 32,400 | 64,800 | 194,400 |
| Screws | 0.02 | No | 20 | 14,000 | 280 | 84,000 | 1,680 | 25 | 12,500 | 250 | 75,000 | 1,500 | 24 | 21,600 | 432 | 129,600 | 2,592 |
| 39,200 | 406,280 | 235,200 | 2,437,680 | 37,500 | 457,750 | 225,000 | 2,746,500 | 63,900 | 850,032 | 383,400 | 5,100,192 | ||||||
| Material Description | PRICE | UNIT | MATERIAL WISE | ||||||||||||||
| 1M - Total Quantity | 1M - Total Budget | 6M - Total Quantity | 6M - Total Budget | ||||||||||||||
| Steel | 20 | KG | 10,100 | 202,000 |
&nbs
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Costs
Raw materials purchased
$ 75,000
Direct Labor
55,000
Indirect labor
33,000
Factory equipment maintenance and depreciation
15,000
Factory rent
36,000
Factory supplies
6,000
Selling & administrative expenses
100,000
Inventories
Beginning Balance
Ending Balance
Raw Materials
$ 5,000
$20,000
Work in Process
25,000
30,000
Finished Goods
20,000
35,000
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22
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