Chapter 24, Problem 1CP

To determine

Operating Budget and Cash budget:

The Operating budgets are the budget which have been prepared for the coming year for various departments to be taken as target to be achieved for various departments. The Initial step in preparation of Operating budget is the preparation of Sales Budget and on the basis of this budget, the production budget is prepared. After making the production and sales budget, various other cost budget shall be prepared like labour, manufacturing overheads, selling and admin overheads, cost of goods sold budget. The Budgeted cash collection and cash payments to be made shall also be prepared basis the sales and material purchase budget.

When all the operating budgets are prepared, then the cash budget is prepared on that basis after making analysis of cash receipts and payments during the period.

Requirement1:

The preparation of sales budget.

To determine

Requirement2:

The preparation of Production budget.

To determine

Requirement3:

The Statement showing expected cash receipts during the period.

To determine

Requirement4:

The Preparation of Material Purchase budget in $.

To determine

Requirement5:

The Statement showing expected disbursals for material purchases.

To determine

Requirement6:

The Preparation of Budgeted labour cost.

To determine

Requirement7.

The preparation of Manufacturing Overheads cost budget.

To determine

Requirement8.

The Preparation of Selling and admin overheads.

To determine

Requirement9.

The Preparation of Cost of Goods sold budget.

To determine

Requirement10.

The preparation of cash budget.