Marks Allocated Marks Earned Cover page 2 marks 2 Table of Contents 2 marks 3 Formatting 1 mark 5 marks 4 Sales Budget Schedule of expected Cash 5 Collections 15 marks 6 Production Budget 10 marks 15 marks 7 Direct Materials Budget Schedule of Expected 8 Cash Disbursements 15 marks 9 Direct labor Budget 5 marks 10 CASH BUDGET 30 marks TOTAL 100 MARKS Part I - Group Project Rexdale Electrical Company is a manufacturer and seller of specialty good. Information on actual and projected sales in units is given below. Use this information to answer all questions below. Month Units January 2018 February 2018 March 2018 April 2018 May 2018 June 2017 20,000 25,000 40,000 50,000 55,000 60,000 Required: 1. Prepare a sales budget in units and dirham for February, March and April. The selling price per unit is AED 22. 2. Assume that the company collects 25% of its sales in the month of the sale, 75% in the month following the sale. Prepare a Cash Receipts schedule for February, March and April. Accounts Receivable balance at the end of January was 370,000 DH. 3. Refer to the projected sales that you have calculated. Prepare a Production Budget for February, March and April. The company's inventory at the end of each month must equal 15% of next month's sales. January 31 inventory balance was 3,700 units Prepare a Direct Materials Purchase Budget for February, March and April based on the production budget above. One unit of product requires 7 ounces of materials and the company's policy is to maintain an ending inventory of materials equal to 20% of next month's production needs. Each ounce of direct materials cost 1.40 DH. January 31 inventory balance was 26,000 ounces. 5. Assuming that the company's policy is to pay 30% of each month's cost of materials purchases in the same month and 70% in the month after, prepare a Cash Disbursement (cash payment) budget for February, March and April. The accounts payable balance at the end of January was AED 280,000 and is to be paid in full in February (5 and Total of Cover marks) PART 1: Required to Prepare: 1. Sales budget (5 marks) 2. Schedule of expected cash collections, by month and in total (15 marks) 3. Production budget by month total (10 marks) 4. Direct materials budget, by month and in total for the quarter. (15 marks) 5. Schedule of expected cash disbursements, by month and in total (15 marks) 6. Direct labor Budget, by month and in total for the Quarter (5 marks) Total of Part 1 (65 marks) PART II: Assume the following information for Rexdale Electrical Company: The company, maintains a 15% open line of credit for $175,000 with a local bank The Company maintains a minimum cash balance of $30,000 The company borrows on the first day of the month and repays loans on the last day of the month. The company pays a cash dividend of $149,000 in February The Company Purchases $240,000 of equipment in March and another one for $140,000 in April (both purchases paid in cash). The company has an February 1 cash balance of $40,000 Required to Prepare: A Cash Budget (30 marks) Total of Part II (30 marks) Grand Total Marks) (100
