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in magazines and offer customer free shipping and toll free telephone number recent figmes follow: Paint and supplies Carpeting wallpaper S ales 190,000 230,000 70.000 Less variable cost 114,000 161,000 56.000 Fixed costs 28,000 37,500 22.000 Total cost 142,000 198,500 78.000 operating income 48,000 31,500 43,000 Management is studying whether to drop wallpaper because of the changing market and accompanying loss i the line is dropped the following changes are expected to occur a. The vacated space will be remodeled at a cost of 15,000 and will be devoted to an expanded line of high and carpet sales of carpet are expected to increase by 100,000 (2 marks) . Contemporary can cut wallpapers xed costs by 50% Sales of paint and paint supplies are expected to fall by 30% (1 marks) (1 marks) . Considering (a), (b) and (c), explain your decision whether to drop or retain the wallpaper {1 marks) Question No. 3 HASF PVT.LTD BUDGETED INCOME STATEMENT FOR 1" QUARTER 1999 Description JANUARY FEBRUARY MARCH Sales 285,000 323,000 221,000 Hurchases 129,000 168,000 95,000 Wages 35,000 37,000 30,000 Supplies 26.000 23.000 21,500 Utilities 6,500 8,700 7,200 Rent 15,000 12,800 13,600 Insurance 12,000 12,000 12,000 Advertising 24,500 28,500 13,000 Depreciation 20,000 20,000 20,000 Net Prot 17,000 13,000 3,700 Required: a. Please make a cash budget for the months of January, February and March 1999 based on the data for: (5 Marks) View Receivable Trend: I 30% of Sales are collected in the month of sale o 30% of Sales are collected after the month of sale - 40% of Sales are collected two months after the sale is made View Payable Trend: I 10% of Purchases are paid for in the month of purchase I 35% of Purchases are paid after the month of purchase U 55% of Purchases are paid two months after the purchase is made Additional Infomalion: - Rent and Insurance expense were prepaid at the end of 1998 I All other expenses are paid for in the month they were incurred I November Sales = 195,000 0 November Purchases : 100,000 0 December Sales : 250,000 I December Purchases = 165,000 - Please see attached Budgeted Income Statement for 1st Quarter 1999 b. Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200) (2 marks) Question No. 4 HASF Corporation manufactures products A, B, and C from ajoint processl Joint costs are allocated on the basis of relative sales value at the end of the joint process. Additional information for HASP are as follows: A B C Total Units produced 12,000 8,000 4,000 24,000 Joint costs 144,000 60,000 36,000 240,000 Sales value before additional processing 240,000 100,000 60,000 400,000 Additional costs for further processing 23,000 20,000 12,000 60,000 Sales value if processed further 230,000 120,000 70,000 470,000 Required: a. Which, if any, of products A, B, and C should be processed further and then sold? (1 marks) b. Keeping in View the answer of "part a", write down your critical feedback to support your answer (Word limit Max 200) {1 marks) Question No. 5-1 In planning its operations for 2011 on the basis of a sales forecast of 6,000,000 ASF Incl prepared the following estimated data Costs and Expenses Direct Material 1 4,, Variable 1 000,000 1 Annnnn Fixed
