The following information has been assembled by Sancross Products Ltd which manufactures and retails products A and B. The details given below relate to the year commencing 1 July 2000:
Standard Product
Price per kg A kg g
Direct material – M1 Sh 4 15 20
M2 Sh 5 14 12
Standard Product
Rate per hour A hours B hours
Direct labour – L1 Sh 8 20 15
L2 Sh 10 22 24
Fixed production overhead is applied on direct labour basis. Administration, selling and distribution expenses are recovered at the rate of 20% of production cost and profit loaded at 25% of standard production cost.
Product
A B
Sh ‘000’ Sh ‘000’
Projected sales for the year 12,033 10,053
Finished goods stock position valued at production cost is expected to be as follows:
Product
A B
Sh ‘000’ Sh ‘000’
1 July 2000 3,000 2,000
30 June 2001 5,000 4,000



Direct material stocks valued at standard prices are as follows:
Material
M1 M2
Sh ‘000’ Sh ‘000’
1 July 2000 200 250
30 June 2001 220 270
For the year to 30 June 2001, fixed production overhead has been estimated at
Sh 1,800,000 and direct labour at 1,200,000 hours.
No opening or closing work-in-progress is anticipated.
Required:
a) Production budget in units.
b) Direct materials cost budget.
c) Purchases budget in value.
d) Direct labour cost budget.