A company is drawing its production plan for the next year in respect of two of its products ‘Gamma’ and ‘Delta’. The company’s policy is not to carry any closing work-in-process (WIP) at the end of...

A company is drawing its production plan for the next year in respect of two of its products ‘Gamma’ and ‘Delta’. The company’s policy is not to carry any closing work-in-process (WIP) at the end of any month. However, its policy is to hold a closing stock of finished goods at 50 per cent of the anticipated quantity of sales of the succeeding month. For the next year, the company’s budgeted production is 20,000 units of ‘Gamma’ and 25,000 units of ‘Delta’. The following is the estimated cost data:

You are required to

(a) Prepare a production budget showing month-wise number of units to be manufactured:

(b) Present a summarised production cost budget for the half-year ending September 30.