Answer the following questions in as much detail as possible. 1a) The 6-month cash budget shows that your business will exceed its overdraftlimit in May. Discuss what action you would take and why. 6 marks (type your answer here) 5 marks 1b) Penny Ltd is a new business and is expecting the following sales. Thepolicy is to hold closing finished goods inventory equivalent to 30% of the next month's sales. Units Maye June July August Sales 2200 2300 2500- 2000 Calculate production for the months May, June ar ale(Alt + A) (type your answer here) 5 marks 1c) Tense Ltd currently has fixed costs of 10,000. Sales revenue per unit is 13 and variable costs are 8 per unit. Next year the company wants to achieve a profit of 6,000. Sales revenue will rise by 30% and variable costs rise by 20%. The company wants the Break Even Point to remain the same as this year. What do fixed costs need to be for this to happen? (type your answer here) 7 marks 1d) RoxLtd wants to purchase a machine costing 35,000 with a residual value of 13,000. The company uses an 8% discount rate. The following cashflows are expected: Year 1: 18,000- Year 2: 23,000 Year 3: 22,000 Page 2 of 13H Calculate the Payback period and ii) the Net Present Value Payback Period: (type your answer here) Net Present Value: (type your answer here) 5 marks 1e) Project A- Payback Periode 2 years: NPV 20,000 Project B 2.5 years 21,000 Project C 3 years. 18,800 Project D 4 years 27,000 1- 5 marks 2 1e) Project A- Payback Period: 2 years: NPV 20,000 ARR 14% IRR- 13% Project BP 2.5 years. 21,000 18% Project CP 3 years 18,800 11% Project D- 4 years 27,000 17% 17% 10% 17% Discuss which project you would choose and why. Project Reason: (type your answer here) 1 2 marks 1fi) In order to be relevant, costsmust have certain qualities, what are they? (type your answer here) . 6 marks + 1 fii) The following information is available: Material X Material Ye Historic cost 4 per kg 7 per kg Current cost 6 per kg 8 per kg Scrap 3 per kg. 5 per kg. Inventory levels 100kg Okg Other This material is not used anymore This is used in lot of processes and would be disposed of if not in this business used in the order. Material Z is poisonous and if not used in this contract will be disposed of at 1.50 per kg; there are 100kg in inventory What is the relevant (minimum) cost of the following order which requires:- 150kg Material X 50kg Material Y 60kg Material z (type your answer here) BEFORE THE END OF THE EXAM 14:30 BST Monday 19 April 2021 (See the Submission Instruction Sheet on the IYOB Examinations ELE SECTION A-KEY IDEAS ANSWER ALL QUESTIONS (36 marks) QUESTION 1 (ANSWER ALL QUESTIONS) Answer the following questions in as much detail as possible. 12) The 6-month cash budget shows that your business will exceeds overdraft limit in May. Discuss what action you would take and Pope your answer there sh! Penny Lad is a new business and is expecting the following sales The policy is to hold closing finished goods inventory equivalente 30% of the next month's sales Units May June July August Sales 2000 2200 2300 2500 Calculate production for the months May, June and July te) Tense Lid currently has fixed costs of 10.000. Sales revenue per unit is 13 and variable costs are per unit Next year the company wants to achieve a profit of 6.00 Sales revenue will rise by 30% and variable costs rise by 20%. The company wants the Break Even Point to remain the same as this year. What do Fixed costs need to be for this to happen? type your answer here the 1d) Row Lid wants to purchase a machine conting 35.000 with following cashflows are expected Year 2023,000 Your 3 22.000 Calculate the Payback period and the Net Present Value Payback Period flype your answer here Net Present Value Type your answer . Project Project Project Project Payback period 2 years 2.5 years 3 years 4 years NPV 20.000 21.000 18.000 627.000 ARR 14% 18% 11% 17% IRR 13% 17% 10% 17. Discuss which project you would choose and why. Reason: pe your answer here 1) In order to be relevant, costs must have certain qualities, what are tay type your answer her Answer the following questions in as much detail as possible. 1a) The 6-month cash budget shows that your business will exceed its overdraftlimit in May. Discuss what action you would take and why. 6 marks (type your answer here) 5 marks 1b) Penny Ltd is a new business and is expecting the following sales. Thepolicy is to hold closing finished goods inventory equivalent to 30% of the next month's sales. Units Maye June July August Sales 2200 2300 2500- 2000 Calculate production for the months May, June ar ale(Alt + A) (type your answer here) 5 marks 1c) Tense Ltd currently has fixed costs of 10,000. Sales revenue per unit is 13 and variable costs are 8 per unit. Next year the company wants to achieve a profit of 6,000. Sales revenue will rise by 30% and variable costs rise by 20%. The company wants the Break Even Point to remain the same as this year. What do fixed costs need to be for this to happen? (type your answer here) 7 marks 1d) RoxLtd wants to purchase a machine costing 35,000 with a residual value of 13,000. The company uses an 8% discount rate. The following cashflows are expected: Year 1: 18,000- Year 2: 23,000 Year 3: 22,000 Page 2 of 13H Calculate the Payback period and ii) the Net Present Value Payback Period: (type your answer here) Net Present Value: (type your answer here) 5 marks 1e) Project A- Payback Periode 2 years: NPV 20,000 Project B 2.5 years 21,000 Project C 3 years. 18,800 Project D 4 years 27,000 1- 5 marks 2 1e) Project A- Payback Period: 2 years: NPV 20,000 ARR 14% IRR- 13% Project BP 2.5 years. 21,000 18% Project CP 3 years 18,800 11% Project D- 4 years 27,000 17% 17% 10% 17% Discuss which project you would choose and why. Project Reason: (type your answer here) 1 2 marks 1fi) In order to be relevant, costsmust have certain qualities, what are they? (type your answer here) . 6 marks + 1 fii) The following information is available: Material X Material Ye Historic cost 4 per kg 7 per kg Current cost 6 per kg 8 per kg Scrap 3 per kg. 5 per kg. Inventory levels 100kg Okg Other This material is not used anymore This is used in lot of processes and would be disposed of if not in this business used in the order. Material Z is poisonous and if not used in this contract will be disposed of at 1.50 per kg; there are 100kg in inventory What is the relevant (minimum) cost of the following order which requires:- 150kg Material X 50kg Material Y 60kg Material z (type your answer here) BEFORE THE END OF THE EXAM 14:30 BST Monday 19 April 2021 (See the Submission Instruction Sheet on the IYOB Examinations ELE SECTION A-KEY IDEAS ANSWER ALL QUESTIONS (36 marks) QUESTION 1 (ANSWER ALL QUESTIONS) Answer the following questions in as much detail as possible. 12) The 6-month cash budget shows that your business will exceeds overdraft limit in May. Discuss what action you would take and Pope your answer there sh! Penny Lad is a new business and is expecting the following sales The policy is to hold closing finished goods inventory equivalente 30% of the next month's sales Units May June July August Sales 2000 2200 2300 2500 Calculate production for the months May, June and July te) Tense Lid currently has fixed costs of 10.000. Sales revenue per unit is 13 and variable costs are per unit Next year the company wants to achieve a profit of 6.00 Sales revenue will rise by 30% and variable costs rise by 20%. The company wants the Break Even Point to remain the same as this year. What do Fixed costs need to be for this to happen? type your answer here the 1d) Row Lid wants to purchase a machine conting 35.000 with following cashflows are expected Year 2023,000 Your 3 22.000 Calculate the Payback period and the Net Present Value Payback Period flype your answer here Net Present Value Type your answer . Project Project Project Project Payback period 2 years 2.5 years 3 years 4 years NPV 20.000 21.000 18.000 627.000 ARR 14% 18% 11% 17% IRR 13% 17% 10% 17. Discuss which project you would choose and why. Reason: pe your answer here 1) In order to be relevant, costs must have certain qualities, what are tay type your answer her