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ABC Pty Ltd produces turbines used in the production of hydro-electric generating equipment. The turbines are sold to various engineering companies that produce hydropowered generators

ABC Pty Ltd produces turbines used in the production of hydro-electric generating equipment. The turbines are sold to various engineering companies that produce hydropowered generators in Australia.

Details of the operations for the coming four months are provided in the attached excel spread sheet.

Requirement:

Prepare the following budgets for:

  1. Monthly Selling & Administrative Expenses Budget for the quarter ending June
  2. Ending Inventory Budget for the month of June
  3. Cost of goods Sold Budget for the quarter
  4. Budgeted Income Statement for the quarter
  5. Monthly Cash budget for the quarter.

image text in transcribed
ABC Pty Ltd Sales April May June July Actual Sales Volume 3-moths to June Units 67,500 54,000 60,750 81,000 162,200 Unit selling price $6,200 The desired finished goods inventory for each month is 60% of the next month's sales The full absorption cost of the opening finished goods inventory is $4,730 per unit The variable manufacturing cost of the opening finished goods inventory is $1,930 per unit Finished goods inventory on April 1 is 43,200 units Materials required to be on hand at the beginning of the month to produce 20% of that month's estimated sales Direct Material used per unit Actual Material Used - 3 months to June Rotor Blades Rotor Blades Quantity 5 750,800 729,100 Cost per unit $81 $108 Actual cost of material Used - 3 months to June $48,651,840 $80,883,680 Budgeted Direct Labour time per unit 8 hours Actual Labour Used - 3 months to June 1,662,590 Direct Labour cost per hour $50 Actual cost of labour Used - 3 months to June $70,660,100 Budgeted Manufacturing Overheads Recent statistical data for Maintenance Costs Fixed Cost Variable Cost component component per month per DL hour Labour Hours Total Maintenance Costs 1,302,800 $79,920,000 Indirect labour $0 56.70 1,485,000 $86,805,000 Power $5.40 1,363,500 $82,215,000 Maintenance 30,705,000 37.78 1,242,000 $77,625,000 Supervision $37,800,000 $3,375,000 $0 Depreciation Rates & Utilities $2,789,100 Other $13,500,000 $40.50 April May June Variable Selling Expenses $62,775,000 $50,220,000 $56,497,500 Fixed Selling & Admin Expenses $24,300,000 $19,440,000 $21,870,000 Total Selling & Admin Expenses $87,075,000 $69,660,000 $78,367,500 Cash on hand at opening $3,375,000 Annual interest rate on borrowing 6% Cash Sales $0 Received in month of sale 80% Received in month after sale 18% Balance of accounts receivables at the start of the month $82,863,000 Dividends paid in June $1,194,750 Land purchased in May $185,100,000

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