Prepare cash budget for the month of April, May, and June 2019. Balance at the end of March 2019 shows an overdraft balance of RM48,000.
Transcribed Image Text:Q1.
(a)
Tasty Food Industries produces and sells cookies for local market. Data for the
production of one packet of cookies are as follows:
Material per packet
Special flour
Icing sugar
1kg at RM1.20 per kg
½ kg at RM4.80 per kg
Labor per packet
Mixing operation
Wrapping operation
12 minutes at RM10.50 per hour
24 minutes at RM10.00 per hour
During the second quarter of 2019, the expected productions are as follows:
April
Мay
June
48,000 packets
45,000 packets
46,000 packets
Projected data supporting the production are summarized as below:
1.
Sales
February
March
April
May
June
RM500,000
RM540,000
RM720,000
RM630,000
RM600,000
A cash sale is 40% and the remaining balance will be paid two months
after sales. It is also expected that 5% of the remaining sales balance
will be uncollectable.
2.
Payments to suppliers are made in the month of purchase.
3.
Administrative expenses (including depreciation) are RM24,350;
RM24,950 and RM21,150 for April, May and June respectively.
Labor and administrative expenses are paid in the month in which they
are incurred.
4.
5.
Other monthly costs are:
April
RM
May
RM
June
RM
Water and electricity
Stationery
Depreciation
General expenses
Rent
2,110
3,240
5,750
1,850
2,850
2,320
1,980
1,850
5,750
2,340
2,850
2,300
5,750
2,760
2,850
Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.
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