P Ltd. manufactures two products called ‘X’and ‘Y’. Both products use a common raw material Z. The raw material Z is purchased @72 per kg from the…

P Ltd. manufactures two products called ‘X’and ‘Y’. Both products use a common raw material Z. The raw material Z is purchased @72 per kg from the market. The company has decided to review inventory management policies for the forthcoming year. The following forecast information has been extracted from departmental estimates for the year ended 31st March 2025 (the budget period): Product X Product Y Sales (units) 28,000 13,000 Finished goods stock increase by year-end 320 160 Post-production rejection rate (%) 4 6 Material Z usage (per completed unit, net of wastage) 5 kg 6 kg Material Z wastage (%) 10 5 Additional information: Usage of raw material Z is expected to be at a constant rate over the period.Annual cost of holding one unit of raw material in stock is 11% of the material cost.The cost of placing an order is 15,600 per order.The management of P Ltd. has decided that there should not be more than 40 orders in a year for the raw material Z. Required: (a) (i) Prepare Production budget for Products X and Y (in units) for the year ended 31st March 2025. (ii) Calculate the Economic Order Quantity for Material Z (in kgs).