can you do the VAT budget
Ma Sto Ltd MaSto Ltd is a small company, which extracts raw stones and then cuts them. The company exploits a marble quarry in Northern Italy and sells its products to big construction companies. MaSto runs a just-in-time production: products are made to order by Masto. Nevertheless, the company keeps a stock of marble stone blocks (also called raw stones) as this material is unique and the demand quite volatile. Construction companies are used to sending their forecasted demand in volume for the quarter to come so that MaSto can prepare its production. You are in charge of presenting the budget for the first quarter: operating budgets, forecasted income statement, VAT budget, cash budget and forecasted balance sheet MaSto is organized around three main functions Distribution Production (including procurement) Management and administration Social charges rate equals 40% of wages and salaries. Distribution The sales for the first quarter are expected to be: 10 200 cut marble stones sold 96 per unit. Distribution The sales for the first quarter are expected to be: 10 200 cut marble stones sold 96 per unit. Through analysis of previous sales, one can assess the following seasonality rates January February 1,05 1 March 0,95 quarter 3 Seasonality rates Staff cost: monthly salary per employee, excluding social charges 1 director 6,000 1 assistant 3,000 5 salesmen 2,000 1 employee 1,500 Other expenses The salesmen commission represents 4 per unit sold. Depreciation amounts to 7,000 per month. And monthly miscellaneous expenses are equal to 2,500. Production The production department manufactures the exact volume of sales. Staff cost: monthly salary per employee, excluding social charges 1 director 4,600 2 assistant managers 2,100 MBAT Masto Case 1 mechanic 1 employee 17 workers 1,850 1,850 1,500 Production time per worker represents 130 hours a month. To cope with an upsurge in activity the director may hire part-time workers. Contracts are generally for 40, 80 or 130 hours. These hours are considered fully productive. The hourly salary amounts to 20 (excluding social charges). The capacity of each of the three saw chains is 160 hours per month. The director is considering purchasing a new saw chain if a lack of capacity has proven. The purchasing price is 81,600 and the chain, if purchased, will be depreciated in straight line over 8 years and will be paid half in January and half in April. The Production time for one unit is 41 minutes for the labor time and 10 minutes for the machine time. Production expenses for 1 month Depreciation Rent Miscellaneous expenses 16,000 40,000 36,000 92,000 Variable cost (electricity, oil ...) represents 7 per machine-hour. Procurement The purchasing price for raw stone is 15.2 per unit. Inventory on 1 January equals 300 raw stones. Safety stock = 200 raw stones. Management and administration Forecasted monthly expenses are expected to be as follows: Salaries 23 000 Social charges 9 200 Taxes 10 000 Financial interests 6 000 Depreciation 7 000 Other fixed expenses 3 000 Balance sheet on 31/12/ N Euros Euros ASSETS Current assets : Cash Debtors (customers) Stock 50,350 330,000 4,650 LIABILITIES Current liabilities : Creditors (suppliers) VAT payable Social security 160,000 42,000 120,000 Total current Assets Total current liabilities 322 000 Plant & Equipment: Buildings and equipment Accumulated depreciation 720,000 -120,000 Shareholders' equity : Ordinary shares Retained earnings Loan 600,000 25,000 38,000 Plant and equipment net 600,000 Total shareholders' equity Total Assets 985 000 985 000 Cash collection Customers pay the month following the sales. Suppliers allow one month's credit VAT and social charges are paid the month after being incurred. Other expenses are paid cash. Ma Sto Ltd MaSto Ltd is a small company, which extracts raw stones and then cuts them. The company exploits a marble quarry in Northern Italy and sells its products to big construction companies. MaSto runs a just-in-time production: products are made to order by Masto. Nevertheless, the company keeps a stock of marble stone blocks (also called raw stones) as this material is unique and the demand quite volatile. Construction companies are used to sending their forecasted demand in volume for the quarter to come so that MaSto can prepare its production. You are in charge of presenting the budget for the first quarter: operating budgets, forecasted income statement, VAT budget, cash budget and forecasted balance sheet MaSto is organized around three main functions Distribution Production (including procurement) Management and administration Social charges rate equals 40% of wages and salaries. Distribution The sales for the first quarter are expected to be: 10 200 cut marble stones sold 96 per unit. Distribution The sales for the first quarter are expected to be: 10 200 cut marble stones sold 96 per unit. Through analysis of previous sales, one can assess the following seasonality rates January February 1,05 1 March 0,95 quarter 3 Seasonality rates Staff cost: monthly salary per employee, excluding social charges 1 director 6,000 1 assistant 3,000 5 salesmen 2,000 1 employee 1,500 Other expenses The salesmen commission represents 4 per unit sold. Depreciation amounts to 7,000 per month. And monthly miscellaneous expenses are equal to 2,500. Production The production department manufactures the exact volume of sales. Staff cost: monthly salary per employee, excluding social charges 1 director 4,600 2 assistant managers 2,100 MBAT Masto Case 1 mechanic 1 employee 17 workers 1,850 1,850 1,500 Production time per worker represents 130 hours a month. To cope with an upsurge in activity the director may hire part-time workers. Contracts are generally for 40, 80 or 130 hours. These hours are considered fully productive. The hourly salary amounts to 20 (excluding social charges). The capacity of each of the three saw chains is 160 hours per month. The director is considering purchasing a new saw chain if a lack of capacity has proven. The purchasing price is 81,600 and the chain, if purchased, will be depreciated in straight line over 8 years and will be paid half in January and half in April. The Production time for one unit is 41 minutes for the labor time and 10 minutes for the machine time. Production expenses for 1 month Depreciation Rent Miscellaneous expenses 16,000 40,000 36,000 92,000 Variable cost (electricity, oil ...) represents 7 per machine-hour. Procurement The purchasing price for raw stone is 15.2 per unit. Inventory on 1 January equals 300 raw stones. Safety stock = 200 raw stones. Management and administration Forecasted monthly expenses are expected to be as follows: Salaries 23 000 Social charges 9 200 Taxes 10 000 Financial interests 6 000 Depreciation 7 000 Other fixed expenses 3 000 Balance sheet on 31/12/ N Euros Euros ASSETS Current assets : Cash Debtors (customers) Stock 50,350 330,000 4,650 LIABILITIES Current liabilities : Creditors (suppliers) VAT payable Social security 160,000 42,000 120,000 Total current Assets Total current liabilities 322 000 Plant & Equipment: Buildings and equipment Accumulated depreciation 720,000 -120,000 Shareholders' equity : Ordinary shares Retained earnings Loan 600,000 25,000 38,000 Plant and equipment net 600,000 Total shareholders' equity Total Assets 985 000 985 000 Cash collection Customers pay the month following the sales. Suppliers allow one month's credit VAT and social charges are paid the month after being incurred. Other expenses are paid cash
