Sales in December (2019) were 4000 units @ sar10 per unit. Monthly sales for the first four months of the next year (2020) are forecasted as follows: Months units January 5,000 February 8,000 March 6, 000 April 5, 000 Unit selling price SAR 10 The following information given to you as follows: Normally 60% of sales are collected in the month incurred and the remainders are collected in the month following the sales. Dallah groups wants closing stock equals 10% of the following month’s budgeted sales in units. on December 31 st , 400 units were on hand. Material required for the required production units are 3,500 Mts , 4,500 Mts., and 6,500 Mts. Respectively for the month of January , February and march The cost of 1 Mts of material is SAR 10. 1 Labor hour will be taken for each unit of production and labor cost per hour is SAR 2 Unit Variable manufacturing overhead is SAR 3 and fixed manufacturing overhead cost is SAR 1,000 for every month. The cash balance as on December 2019 is SAR 100,000. Required: Using the data given above, prepare the following detailed schedules along with other supportive schedules for the First quarter (JAN- FEB –MARCH) of the year 2020. Sales budget Production budget Production cost budget Cash budget Supportive schedules Cash collection schedule Direct material schedule Direct labor schedule Variable manufacturing cost schedule.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Sales in December (2019) were 4000 units @ sar10 per unit. Monthly sales for the first four months of the next year (2020) are
Months units
January 5,000
February 8,000
March 6, 000
April 5, 000
Unit selling price SAR 10
The following information given to you as follows:
- Normally 60% of sales are collected in the month incurred and the remainders are collected in the month following the sales.
- Dallah groups wants closing stock equals 10% of the following month’s budgeted sales in units. on December 31 st , 400 units were on hand.
- Material required for the required production units are 3,500 Mts , 4,500 Mts., and 6,500 Mts. Respectively for the month of January , February and march
The cost of 1 Mts of material is SAR 10.
- 1 Labor hour will be taken for each unit of production and labor cost per hour is SAR 2
- Unit Variable manufacturing overhead is SAR 3 and fixed manufacturing overhead cost is SAR 1,000 for every month.
- The cash balance as on December 2019 is SAR 100,000.
Required:
Using the data given above, prepare the following detailed schedules along with other supportive schedules for the First quarter (JAN- FEB –MARCH) of the year 2020.
- Sales budget
- Production budget
- Production cost budget
Cash budget
Supportive schedules
- Cash collection schedule
- Direct material schedule
- Direct labor schedule
- Variable
manufacturing cost schedule.
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