ABC Inc has the following estimates for the next four months: March April May June Sales units 94 84 96 80 Production units 90 75 90 70 Raw material purchases in units 80 80 85 85 Wages 2550 2875 3850 3850 Variable overheads 1020 1150 1540 1540 Fixed overheads 3200 3200 3200 3200 Estimated sales price Esitmated raw material price per unit 219 € 45 € Wages and overheads are paid the month they are incurred All sales and raw material purchases are on credit: Debtors are allowed 2 months credit Raw materials are purchased on 1 month credit Cash from a loan of 130 000 is due to be received on 1 May Machinery costing An interest payment A dividend of 122 000 will be received in May and paid for in June 9 000 wil be paid in June 12 000 € will be paid in June Depreciation for the four months, including that of the new machinery is: 1 200 € per month (new machine does't yet affect thi Balance sheet information: Beginning cash balance is: 6 750 Beginning accounts receivable, excluding bad debts 18 080 (50% are from last months sales) Beginning accounts payable due to raw material purchases are: Old bad debts in A/R, to be written off in June 3 900 € 3 000 Required: A) Construct the sales budget (in €) for the four months B) Construct a raw material purchases budget C) Construct a cash budget for the four months
ABC Inc has the following estimates for the next four months: March April May June Sales units 94 84 96 80 Production units 90 75 90 70 Raw material purchases in units 80 80 85 85 Wages 2550 2875 3850 3850 Variable overheads 1020 1150 1540 1540 Fixed overheads 3200 3200 3200 3200 Estimated sales price Esitmated raw material price per unit 219 € 45 € Wages and overheads are paid the month they are incurred All sales and raw material purchases are on credit: Debtors are allowed 2 months credit Raw materials are purchased on 1 month credit Cash from a loan of 130 000 is due to be received on 1 May Machinery costing An interest payment A dividend of 122 000 will be received in May and paid for in June 9 000 wil be paid in June 12 000 € will be paid in June Depreciation for the four months, including that of the new machinery is: 1 200 € per month (new machine does't yet affect thi Balance sheet information: Beginning cash balance is: 6 750 Beginning accounts receivable, excluding bad debts 18 080 (50% are from last months sales) Beginning accounts payable due to raw material purchases are: Old bad debts in A/R, to be written off in June 3 900 € 3 000 Required: A) Construct the sales budget (in €) for the four months B) Construct a raw material purchases budget C) Construct a cash budget for the four months
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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