Ahmed LLC Trading Company has produced 20,000 units which is 40% capacity level in the factory. The company has used raw material to make the production worth of RO 55 per unit. The company has incurred direct labour cost at RO 28per unit along with direct expenses RO 22 per unit. The company spent RO 200,000 on fixed expenses in the factory with a per unit cost of RO 10. Other factor expenses for the total production of 20,000 units has arrived at RO 12 per unit. Administration expenses were incurred RO 8 per unit out of which fixed expenses belongs to 55%. Company has appointed a salesman for selling the products produced in the company at RO 8 per unit produced out of which 30% belongs to fixed. The company has also incurred distribution expenses of RO 8 per unit out of which 30% are variable. Requirements: The company has approached the you and ask to prepare the flexible budgets for two more required capacity levels; - 1. 10,000 units and [2.5 Marks] 2. 25,000 units [2.5 Marks] Case Study 4 Ghanim Trading Company is in the business of buying and selling of different types of building material products in Salalah region and provided the following data to understand the cash position every month start from January to July. The sales book reported the sales amount for seven months as below:- January February March April May June July 225,000 260,000 245,000 255,000 267,000 236,000 212,000 The sales reported every month including cash sales and credit sales. Cash sales constitute 25% of total sales collected in the month of sales and the balance is credit sales received in the month following the month of sales. The detail of goods purchased in cash during seven months reported in purchase book as below: - January February March April May June July 12,000 14,000 16,000 18,000 20,000 22,000 24,000 Company also purchased goods on credit from different suppliers. The detail of credit purchase from the month January to July is given below: - January February March April May June July 75,000 72,000 78,250 68,750 49,800 60,000 65,900 Cash purchases payable in the month of purchases and credit purchases are payable to supplier in two months following the month of credit purchase. It is also found from the accounting records that the company purchased plant and equipment for RO 15,000 in the month of March and it is payable in three equal instalments starting from April. Tax department has sent a notice to the company to pay taxes of RO 6,000 each in the month of May and June. The wages and office expenses are paid in the month following the month in which wages and office expenses incurred. The detail of wages and office expenses is given below: - January February March April May June July Wages 6,000 6,250 6,750 6,780 6,900 7,800 6,800 Office Expenses 4,500 4,750 4,800 4,900 5,100 5,620 4,100 The selling expenses of the company recorded for the seven months are as follows: - January February March April May June July 2,650 2,850 3,150 3,650 3,680 3,250 3,850 The company also incurred administrative expenses for the period January to July. The detail of administrative expenses is given as below: - January February March April May June July 2,200 2,300 3,520 2,560 2,560 3,850 2,180 The company is paying the selling and administration expenses in one months following the month in which such expenses incurred. The cash balance as on 1st April is RO 32,500. Requirement: The Company has requested you to prepare Cash budget for the period of April to June.