Aug-19 3 Information on projected sales in units is given below. 4 Month Units 5 Jul-19 150,000 6 195,000 7 Sep-19 255,000 8 Oct-19 285,000 9 Nov-19 165,000 10 Dec-19 150,000 11 1. Prepare a Sales budget in units and AED for the months of July to September 2019 12 and for the quarter in total. The selling price per unit is 165 [10 marks] 13 2. Assume that the company collects 30% of its sales in the month of the sale and the remaining in 14 the month following the sale. Prepare a Cash Receipts schedule for 3 months 15 ending September 2019 and total for the quarter of 2019. Accounts Receivable 16 balance as of June 30, 2019 was AED 5,250,000 (15 marks) 17 3. Refer to the projected sales that you have calculated. Prepare a Production Budget 18 for 3 months ending September 2019 and total for the quarter of 2019. The 19 company's inventory at the end of each month must equal 15% of next month's 20 sales. On June 30, 2019, inventory balance was 22,500 units. [15 Marks) 21 4. Prepare a Direct Materials Purchase Budget in quantity and in dollar amounts for 22 3 months ending September 2019 and total for the quarter of 2019 based on the 23 production budget above. One unit of product requires 5 kilograms of materials and the 24 company's policy is to maintain an ending inventory of materials equal to 10% of 125 next month's production needs. Each kilogram of direct materials cost AED 1 26 June 31, 2019 inventory balance was 33,750 kilograms. [16 marks] 127 5. Assuming that the company's policy is to pay 80% of each month's cost of materials 28 purchases in the same month and the remainder in the month after prepare a Cash 29 Disbursement (cash payment) schedule for 3 months ending September 2019 and 30 total for the quarter of 2019. The accounts payable balance at the end of June 2019 31 was AED 2,500,000. [12 Marks] 32 BHP UZALUULUU UUULUU 32 6. The following are the projected cash expenditures for 2019 in AED: 33 Jul Aug Sep 34 Direct Labor 60,000 84,000 109,200 35 Manufacturing Overhead 15,000 13,500 16,875 36 Selling Expense 12,000 10,800 7,800 37 Administrative Expense 30,000 33,000 36,300 38 Equipment purchase 37,500 112,500 39 On June 30, 2019, the company had a cash balance of AED 4,950,000 on hand. The company 40 has an arrangement with their bank to have a bank overdraft policy of maximum AED 765,000 41 as and when needed and borrows in the nearest '000s. The interest on the overdraft is 2.00% per 42 month and paid at the time of loan repayment. The company also have a policy of maintaining 43 a minimum cash balance of AED 37,500 at the end of each month. 44 Prepare a Cash Budget for the third quarter of 2019. [25 Marks] 45 7. Cover Page and Formatting: 46 a) Cover Page [2 marks] 47 b) Table of contents [2 marks] 48 c) Formatting (3 Marks]
