Assignment Question

You are the recently appointed accountant at Pentamasters Bhd$.$ Pentamasters Bhd$.$ is a new company, which will be incorporated on $1$st Sept $2022.$ Initially, the company manufacture and sell a single electronic product used in the production of drones. The following details relate to the company's first financial year:

The selling price is $$300$ per unit.

Direct materials cost $$85$ per unit

Direct labour is $6$ hours per unit for the first $2$ months, reducing to $5$ hours per unit thereafter.

Direct labour cost $$13$ per hour

Sales targets for the forthcoming financial year are as follows:

$\backslash$table$[[,$Units$],[$Sept $2022,1200],[$Oct$,1400],[$Nov$,1500],[$Dec$,1900],[$Jan $2023,2000],[$Feb$,2000],[$March$,2100],[$April$,2200],[$May$,2000],[$June$,1800],[$July$,1800],[$August$,1900]]$

$85\%$ of sales will be on credit terms, with customers paying two months later. The remaining sales are paid for immediately. Closing inventory is planned to be $10\%$ of the following month's sales target. Sales for Sept $2023$ are expected to be $1,700$ units.

$2$

Direct materials will be purchased during the month they are required for production and paid for during the following month. An overhead absorption rate of $$15$ per direct labour hour has been calculated for the variable production overheads. Variable distribution costs of $$10$ per unit sold will also be incurred.

Total fixed production overheads of $$110,000$ and total fixed administration and distribution overheads of $$75,000$ for the year will be incurred on an even basis throughout the year. All overheads and direct labour costs will be paid for in the month in which they are incurred.

All production machinery will be leased; the costs of leasing the machinery are included in the above figures. Pentamaster will also buy equipment that will be used mainly in the I.T$.$ department. They will purchase and pay for the equipment in Dec $2022.$ The equipment will cost $$25,000$ and will be depreciated by $20\%$ per annum. Depreciation is not included in the overhead details given above.

Pentamaster will issue $140,000$ ordinary shares of $$1$ at par for cash $1$ st Sep $2022$ and the company is unwilling to issue any further shares at this stage. The Board of Directors have little financial knowledge and currently does not include a Finance Director. In order to assist you have been asked to produce the following:

Comments on the budgeted cash position

$(10$ marks$)$

Suggestions of ways the monthly budgeted cash balances could be improved $(10$ marks$)$

An appendix $($created as an Excel workbook$)$ which shows:

The following monthly budgets $($on a single worksheet$)$ for the $12$ months ended $31$ st Aug $2023$ in as much detail as the information given allows $($you should also include a total column for the year$)$:

$>$ The Production Budget $($in units$)$

The Sales Budgets $($in $$)$

The Materials Purchases Budget $($in $$)$The Variable Production Overheads Budget $($in $$)(20$ marks$)$

Monthly Cash Budget for the company for the $12$ months ended $31$st Aug $2023$ in as much detail as the information given allows $($you should also include a total column for the year$)$

$(20$ marks$)$

The following tables are used to grade the elements of the work, as listed in the mark scheme. The overall mark for the coursework will be based on the level at which the weighted majority of the areas are graded.

Assignment Question

You are the recently appointed accountant at Pentamasters Bhd$.$ Pentamasters Bhd$.$ is a new company, which will be incorporated on $1$st Sept $2022.$ Initially, the company following details relate to the company's first financial year:

The selling price is $$300$ per unit.

Direct materials cost $$85$ per unit

Direct labour is $6$ hours per unit for the first $2$ months, reducing to $5$ hours per unit thereafter.

Direct labour cost $$13$ per hour

Sales targets for the forthcoming financial year are as follows:

$\backslash$table$[[,$Units$],[$Sept $2022,1200],[$Oct$,1400],[$Nov$,1500],[$Dec$,1900],[$Jan $2023,2000],[$Feb$,2000],[$March$,2100],[$April$,2200],[$May$,2000],[$June$,1800],[$July$,1800],[$August$,1900]]$

$85\%$ of sales will be on credit terms, with customers paying two months later. The remaining sales are paid for immediately. Closing inventory is planned to be $10\%$ of the following month's sales target. Sales for Sept $2023$ are expected to be $1,700$ units.

$2$

Direct materials will be purchased during the month they are required for production and paid for during the following month. An overhead absorption rate of $$15$ per direct

please show the workings in excel for both monthly budgets and monthly cash budgets, and i want you to give me $10$ points for each of the $10$ marks question. $10$ marks means there should be $10$ sentences related to the monthly budgets and monthly cash budgets