Question
plzz sir do it quickly Question A : ABC Corporation makes one product and has provided the following information to help prepare the master budget
plzz sir do it quickly
Question A : ABC Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:
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|
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Budgeted selling price per unit | $ | 92 |
Budgeted unit sales (all on credit): |
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July... |
| 9,000 |
August . |
| 11,300 |
September |
| 10,400 |
October |
| 10,800 |
November .... 10,500
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| |||
Raw materials requirement per unit of output |
| 4 | pounds | |
Raw materials cost | $ | 1.00 | per pound | |
Credit sales are collected:
40% in the month of the sale
60% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 20% of the following month's sales. Some 2000 units of finished goods was brought out from June. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. Some 13,000 pounds of raw materials were brought out from June. At the end of June, accounts payable for raw materials purchases amounted to $8000.
Requirement:
A1. Prepare a sales budget for the month of July, August and September[ 2 MARKS]
A2. Prepare a cash collection from sales schedule for the month of July, August and September.[2 MARKS].
A3. Prepare a production budget for the month of July, August and September. [3 MARKS]
A4. Prepare raw materials purchase budget for the month of July, August and September[3 MARKS]
A5. The principal purpose of the cash budget is to see how much cash the company will have in the bank at the end of the year. Do you agree? Explain.[3 MARKS]
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