• Required:
• Sales Budget, with a cash receipts.
  • What is the A/R at the end of the month?
• Materials Budget, with cash disbursements.
  • What is the A/P at the end of the month?
• Direct Labour Budget
• Cash budget

Question 1: - Cash Budget: Estimated sales May January 15,000 February 15,000 March 18,000 April 17,500 sales (units) 14,500 Your friend, Chris Coffee, has been running a successful coffee shop for the last couple of years. He has asked you to put together a cash budget. His regular accountant was too busy to help, but told Chris his depreciation expense was going to be $9,000 per year, using the straight-line method. He has supplied you with the following information (above) to help you put together his cash budget. The revenue for a coffee is $5 for a large, $4 for a medium and $3 for a small. 50% of his sales are Large coffees, 25% medium and 25% smalls. Chris has a deal with an accounting company and half of the coffees sold are on account, the other half pay cash. The accounting company pays for the coffees the month after the sale. Assume credit sales are half of the total coffee sales. Material and Labour information Chris has provided: Large 0.1 3 Labour hours Coffee pods Cost of a Coffee pod Medium 0.05 2 $0.90 Small 0.05 Labour is paid at $20/hour. The Coffee pods need to be ordered a month in advance. He requires 10% of next months total coffee pods to be on hand. The beginning coffee pod inventory, February 1, was 3,600 pods. 50% of the Coffee pods are paid in the month they are ordered, 50% are paid the following month. Other information Chris has provided: March 2,500 April 2,500 Rent Dividend Office and Admin February 2,500 3,000 3,500 May 2,500 15,000 3,500 3,500 3,500 NOTE: Chris requires a minimum bank balance of $5,000 at the end of the month and the ending January bank balance is $10,000. Chris has access to a line of credit of $500,000 at an interest rate of 30%. Borrowings are made at the beginning of the month and repayments are made at the end of the month