Finance for six months ended 30th September 2021 Cost type Per unit 2meters Materials: 43 per meter (incl of VAT @ 23%) Labour: 15 per hour 7 hours Go Online will aim its product at the quality end of the leisure market and the expected selling price of 250(exclusive of VAT) per unit will reflect this. 307.50 inclusive of VAT As it also envisages that the product line expanding in the future Go Online has provisionally signed up two well-known online 'influencers' to promote the product and enhance its marketability for the next six months. These influencers will each be paid 25,000 + VAT @ 23% per month for the promotion campaign. Other cost projections to be considered are: Fixed costs April May Admin/sales salaries 1,750,000 1,750,000 Light & heat 510,750 510,750 Selling expenses 1,168,500 1,168,500 Advertising 135,300 135,300 Maintenance/repairs 492,000 492,000 Motor expenses 650,375 650,375 215,250 215,250 Depreciation (per depreciation policy) Loan interest (per loan agreement) June 1,750,000 510,750 1,168,500 135,300 492.000 650,375 215.250 July 1,750,000 510,750 1,168,500 135,300 492,000 650,375 215,250 Aug 1,750,000 510,750 1,168,500 135.300 492.000 650,375 215,250 Sept Total 1,750,000 10,500,000 510,750 3,064,500 1,168,500 7,011,000 135,300 811,800 492.000 2,952,000 650,375 3,902,250 215.250 1,291,500 Office expenses Note: The following cost projections have been stated inclusive of VAT as follows: VAT v 23% VAT v 135 Selling expenses Light & heat Advertising Petrol Maintenance & repairs Motor expenses (note: 1,872,750 relates to petrol costs) Office expenses In order for this line to be considered successful, it must produce a profit of 12,000,000 by the end of September 2021. No other product will be produced or sold during this period. Calculate Sales using this target profit The sales volume required to meet the profit target will be achieved incrementally as follows: Month Apr 10% May 10% Jun 10% Jul 10% Aug 20% Sept 40% (For example Apr sales will be 10% of the annual sales) Expected sales mix per month is expected to be 70% directly to the public via on-line cash sales in Cloud 9's existing on-line store and 30% credit sales on 30 day credit to retail outlets. It is expected that 50% of credit sales receipts will be received in the month following the sale with the remaining 50% received the following month. All operating expenses will be paid in the month incurred. Endorsement fees will accrue over the six months and be paid 50% payable June and the remainder in September No new investment in machinery or equipment is required for the next 6 months. Forecast trading profit and loss account by month for 6 months ended 30th September 2021, contribution format Nov Det Feb Mar Total Sales Selling price per unit Less Direct variable costs Materials per unit Materials cost Labour per unit Labour con Total variable cost Contribution Less fixed costs Selling expenses Advertising Maintenance Motor/petrol expe Office expenses Depreciation Lonn interes Endorsement fees Total face Profit/(loss Cash Forecast for 6 months ended 30th September 2021 Apr May Jun Jul Aug Sept Receipts Trade receivables Cash receipts (70%) Credit receipts (30%) Total receipts Payments (inclusive of VAT) Trade payables Accrued expenses Purchases of materials Direct wages Admin/sales salaries Light & heat Selling expenses Advertising Maintenance/repairs Motor expenses petol Office expenses Endorsement fees Interest payment VAT payments Total payments Net cash movement Opening Cash balance Closing cash balance Finance for six months ended 30th September 2021 Cost type Per unit 2meters Materials: 43 per meter (incl of VAT @ 23%) Labour: 15 per hour 7 hours Go Online will aim its product at the quality end of the leisure market and the expected selling price of 250(exclusive of VAT) per unit will reflect this. 307.50 inclusive of VAT As it also envisages that the product line expanding in the future Go Online has provisionally signed up two well-known online 'influencers' to promote the product and enhance its marketability for the next six months. These influencers will each be paid 25,000 + VAT @ 23% per month for the promotion campaign. Other cost projections to be considered are: Fixed costs April May Admin/sales salaries 1,750,000 1,750,000 Light & heat 510,750 510,750 Selling expenses 1,168,500 1,168,500 Advertising 135,300 135,300 Maintenance/repairs 492,000 492,000 Motor expenses 650,375 650,375 215,250 215,250 Depreciation (per depreciation policy) Loan interest (per loan agreement) June 1,750,000 510,750 1,168,500 135,300 492.000 650,375 215.250 July 1,750,000 510,750 1,168,500 135,300 492,000 650,375 215,250 Aug 1,750,000 510,750 1,168,500 135.300 492.000 650,375 215,250 Sept Total 1,750,000 10,500,000 510,750 3,064,500 1,168,500 7,011,000 135,300 811,800 492.000 2,952,000 650,375 3,902,250 215.250 1,291,500 Office expenses Note: The following cost projections have been stated inclusive of VAT as follows: VAT v 23% VAT v 135 Selling expenses Light & heat Advertising Petrol Maintenance & repairs Motor expenses (note: 1,872,750 relates to petrol costs) Office expenses In order for this line to be considered successful, it must produce a profit of 12,000,000 by the end of September 2021. No other product will be produced or sold during this period. Calculate Sales using this target profit The sales volume required to meet the profit target will be achieved incrementally as follows: Month Apr 10% May 10% Jun 10% Jul 10% Aug 20% Sept 40% (For example Apr sales will be 10% of the annual sales) Expected sales mix per month is expected to be 70% directly to the public via on-line cash sales in Cloud 9's existing on-line store and 30% credit sales on 30 day credit to retail outlets. It is expected that 50% of credit sales receipts will be received in the month following the sale with the remaining 50% received the following month. All operating expenses will be paid in the month incurred. Endorsement fees will accrue over the six months and be paid 50% payable June and the remainder in September No new investment in machinery or equipment is required for the next 6 months. Forecast trading profit and loss account by month for 6 months ended 30th September 2021, contribution format Nov Det Feb Mar Total Sales Selling price per unit Less Direct variable costs Materials per unit Materials cost Labour per unit Labour con Total variable cost Contribution Less fixed costs Selling expenses Advertising Maintenance Motor/petrol expe Office expenses Depreciation Lonn interes Endorsement fees Total face Profit/(loss Cash Forecast for 6 months ended 30th September 2021 Apr May Jun Jul Aug Sept Receipts Trade receivables Cash receipts (70%) Credit receipts (30%) Total receipts Payments (inclusive of VAT) Trade payables Accrued expenses Purchases of materials Direct wages Admin/sales salaries Light & heat Selling expenses Advertising Maintenance/repairs Motor expenses petol Office expenses Endorsement fees Interest payment VAT payments Total payments Net cash movement Opening Cash balance Closing cash balance