1. prod uct: The following budgetestimates are available for Ashton Ltd, manufacturerof a sing le Actualand projected sale s: Cash Credit Ja nuary (actual) 70 800 283 200 February (actual) 72 000 288 000 March(actunl) 71 400 285 600 April (budget) 68 400 273 600 May (budget) 70 800 283 200 June (budget) 72 000 288 000 De btors on average settle their accounts as follows: 50% pay during the month following the monthof sale, and are allowed a discount of 5%, 47% pay during the second month following the month of sak, and 3% prove uncollecta ble. Req uired prod uction is as followe: Month Units March 17900 April 17 400 May 178 50 The inventory policy of the company is to maintainclosing stock of aw materialat B0% of the following month's production require ments. The company uses 5 kg of raw material at a cost of R1,50 per kg, to manufacture one unit. Raw material stock at March01, equals 72 000 kg. Sixty percent of all raw material purcha ses are paid within the month of purcha se, a nd the other forty percent are paid during the month folowing the month of purcha se. Total mate rial purc ha ses for February a mounted to R122 440. Wages are R4 per unit, and factory overhead R3 per unit. Factory oerhead include a monthly depreciation charge of R8 000. Fixed selling and administrative expenses amount to R45 000 per month, including a depreciation charge of R3 000. Monthly variable selling and administrative expenses eq ual 5% of total sales for the month. Wages, factory overhead, and selling and administrative expe nses are all paid during the month incurred. Computers with a book value of R12 000 will be sokl for cashduring March, at computers will be acq uired at a cost of RI 00 000 and would be paid for in five instalments commencing in March The bank balance at March 01 amounted to R18 750.
1. prod uct: The following budgetestimates are available for Ashton Ltd, manufacturerof a sing le Actualand projected sale s: Cash Credit Ja nuary (actual) 70 800 283 200 February (actual) 72 000 288 000 March(actunl) 71 400 285 600 April (budget) 68 400 273 600 May (budget) 70 800 283 200 June (budget) 72 000 288 000 De btors on average settle their accounts as follows: 50% pay during the month following the monthof sale, and are allowed a discount of 5%, 47% pay during the second month following the month of sak, and 3% prove uncollecta ble. Req uired prod uction is as followe: Month Units March 17900 April 17 400 May 178 50 The inventory policy of the company is to maintainclosing stock of aw materialat B0% of the following month's production require ments. The company uses 5 kg of raw material at a cost of R1,50 per kg, to manufacture one unit. Raw material stock at March01, equals 72 000 kg. Sixty percent of all raw material purcha ses are paid within the month of purcha se, a nd the other forty percent are paid during the month folowing the month of purcha se. Total mate rial purc ha ses for February a mounted to R122 440. Wages are R4 per unit, and factory overhead R3 per unit. Factory oerhead include a monthly depreciation charge of R8 000. Fixed selling and administrative expenses amount to R45 000 per month, including a depreciation charge of R3 000. Monthly variable selling and administrative expenses eq ual 5% of total sales for the month. Wages, factory overhead, and selling and administrative expe nses are all paid during the month incurred. Computers with a book value of R12 000 will be sokl for cashduring March, at computers will be acq uired at a cost of RI 00 000 and would be paid for in five instalments commencing in March The bank balance at March 01 amounted to R18 750.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1.calculate the
2.calculate the collection for debtors for March.
Transcribed Image Text:23:58 -
4G ll i 55%
QUESTION 1.docx O 2 <
1.
The following budgetestimates are availa ble for Ashton Ltd, manufacturerof a sing le
prod uct:
Actualand projected sales:
Cash
Credit
R
R
January (actual)
70 800
283 200
February (actual)
72 000
288 000
March (actual)
71 400
285 600
April (budget)
68 400
273 600
May (budget)
70 800
283 200
June (budget)
72 000
288 000
De btors on average settle theiraccounts as follows:
50% pay during the month following the monthof sale, and are allowed a discount of
5%,
47% pay during the second month following the month of sale, and
3% prove uncolectable.
Required production is as follows:
Month
Units
March
17900
Аpril
17 400
Мay
17850
The inventory policy of the company is to maintainclosing stock of raw materialat 80% of the
following month's production require ments. The company uses 5 kg of raw material at a cost of RI,50
per kg, to manufacture one unit. Raw meterial stock at March01, equals 72 000 kg. Sixty percent of all
raw material purcha se s are paid within the month of purcha se, and the other forty percentare paid
during the month folowing the month of purcha se. Total material purcha ses for February amounted to
R122 440.
Wages are R4 per unit, and factory overhead R3 per unit. Factory overhead include a monthly
depreciation charge of R8 000. Fixed selling and administrative expenses amount to R45 000 per
month, including a depreciation charge of R3 000. Monthly variable selling and administrative
expenses equal 5% of total sales for the month Wages, factory overhead, and selling and
administrative expenses are all paid during the month inc urred.
Computers with a book value of R12 000 will be sold for cashduring March at
computers will be acquired at a cost of R100 000 and would be paid for in five
instalments commencing in March
The bank balance at March01 amounted to R18 750.
Expert Solution
Step 1
Cash Budget - It is a statement showing an estimation of cash flow over a specific period of time.
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