september is not required .. just fromJune to august
April Case Study - 5 Future Plastics LLC is the leading pipe manufacturer in Oman. The company procures threaded tees from various international suppliers and sells for companies in industrial, infrastructure and construction sectors in Oman. The Marketing Department of the company has developed the sales forecast for the months of March to August 2020 assuming the selling price of RO 50 per unit. However, the marketing Department predicts an increase in the selling price by 15% per unit from the month of June 2020. Month Sales forecast (in Units) March 6,000 8,000 May 10,000 June 11,000 July 12,000 August 9,000 Other relevant data: The Cash balance as on 1st June 2020 is RO 25,000 The company has 3000 units of finished goods in stock as on 15 March 2020. The company wishes to maintain the finished goods inventory equal to 50% of the next month sales. Each unit is purchased from the suppliers at RO 30 but the company expects the prices to increase by 10% per unit from the month of July 2020. iii) 30% of the sales are on cash basis. 50% of the sales are collected in the next month and the balance in the following month. iv) Trade Creditors are paid in the month following purchases. v) The selling expenses amount to 30% of sales. The lag in payment of selling expenses is three weeks. The sales commission is paid at 5% of credit sales in the following month in which it is earned. vii) The company has paid the loan outstanding of RO 40,000 in the month of July. viii) Income on investments of RO 2000 is expected to receive in the month of June. ix) The company purchased machinery worth of RO 100,000 in the month of July. The amount is payable in two equal instalments starting from July. x) Depreciate machinery at RO 10,000 per month. As a financial manager, prepare the cash budget of Future Plastics LLC for three months starting from June 2020. (10 Marks) 10 April Case Study - 5 Future Plastics LLC is the leading pipe manufacturer in Oman. The company procures threaded tees from various international suppliers and sells for companies in industrial, infrastructure and construction sectors in Oman. The Marketing Department of the company has developed the sales forecast for the months of March to August 2020 assuming the selling price of RO 50 per unit. However, the marketing Department predicts an increase in the selling price by 15% per unit from the month of June 2020. Month Sales forecast (in Units) March 6,000 8,000 May 10,000 June 11,000 July 12,000 August 9,000 Other relevant data: The Cash balance as on 1st June 2020 is RO 25,000 The company has 3000 units of finished goods in stock as on 15 March 2020. The company wishes to maintain the finished goods inventory equal to 50% of the next month sales. Each unit is purchased from the suppliers at RO 30 but the company expects the prices to increase by 10% per unit from the month of July 2020. iii) 30% of the sales are on cash basis. 50% of the sales are collected in the next month and the balance in the following month. iv) Trade Creditors are paid in the month following purchases. v) The selling expenses amount to 30% of sales. The lag in payment of selling expenses is three weeks. The sales commission is paid at 5% of credit sales in the following month in which it is earned. vii) The company has paid the loan outstanding of RO 40,000 in the month of July. viii) Income on investments of RO 2000 is expected to receive in the month of June. ix) The company purchased machinery worth of RO 100,000 in the month of July. The amount is payable in two equal instalments starting from July. x) Depreciate machinery at RO 10,000 per month. As a financial manager, prepare the cash budget of Future Plastics LLC for three months starting from June 2020. (10 Marks) 10
