Question
Task 1a: CLO3 OBJECTIVE: The purpose of this assignment is to enable learners to understand an organisations financial goals through the preparation of operating, financial,
Task 1a: CLO3
OBJECTIVE: The purpose of this assignment is to enable learners to understand an organisations financial goals through the preparation of operating, financial, and cash budgets that together integrate into a business plan
REQUIREMENT: Budgets and Budgetary Controls
Question
Alya Sdn Bhd. produces and sells granite pots and pans with glass lids to a Japanese company. Rushdi, the new manager, wants to keep an eye on the quarterly budgets for the third quarter ending 30 September 2023 to ensure that the sales targets can be met despite the current economic situation. As a result, the following data is available:
Budgeted sales:
| |||
POTS 60,000 units @$100 each | PANS 40,000 units @$125 each | ||
Budgeted inventories: | |||
Beginning | Ending | ||
Pots Pans Direct material (Granite) Direct material (Glass) Direct material (Handles) | 20,000 8,000 32,000 kg 29,000 kg 6,000 units | 25,000 10,000 36,000 kg 32,000 kg 7,000 units | |
Standard variable costs:
POTS | PANS | |||
Direct materials: Granite Glass Handles Total materials |
5kg @$8.00 3kg @$5.00 1 @$3.00 |
$40.00 15.00 3.00 58.00 |
4kg@$8.00 3kg@$5.00
|
$32.00 15.00
47.00 |
Direct labour Variable manufacturing overhead
Total | 2 hours @ $12.00 2 hours @ $1.50 | 24.00
3.00 85.00 | 3 hours @ $16.00 3 hours @ $1.50 | 48.00
4.50 99.50 |
Variable manufacturing overhead costs are $384,000 per quarter, while fixed factory overhead costs are $214,000 per quarter (including non-cash expenses of $156,000) and are allocated based on total units produced.
Following is some financial information:
- The initial cash balance is $1.8 million.
- Sales are made on credit, with 50% collected in the current period and the remainder in the following period. The previous quarters sales totalled $8,400,000. There are no outstanding debts.
- Purchases of direct materials and labour costs are paid for in the quarter in which they are made.
- Manufacturing overhead expenses are paid in the quarter in which they are incurred.
- All selling and administrative expenses are fixed and paid in the quarter in which they are incurred. They are budgeted at $340,000 per quarter, including depreciation of $90,000.
Required:
Prepare the following for the third quarter ending 30 September 2023:
- Sales budget
- marks)
- Production budget in units
(3 marks)
- Direct materials usage and purchase budget (Granite, Glass & Handles)
(8 marks) d) Direct labour budget
- marks)
(Total 14 marks)
Task 1b: CLO3
Question
Following is some financial information:
- The initial cash balance is $1.8 million.
- Sales are made on credit, with 50% collected in the current period and the remainder in the following period. The previous quarters sales totalled $8,400,000. There are no outstanding debts.
- Purchases of direct materials and labour costs are paid for in the quarter in which they are made.
- Manufacturing overhead expenses are paid in the quarter in which they are incurred.
- All selling and administrative expenses are fixed and paid in the quarter in which they are incurred. They are budgeted at $340,000 per quarter, including depreciation of $90,000.
Required:
Refer to the sales budget prepared in Task 1. Construct a cash budget for Alya Sdn. Bhd. for the third quarter ending 30 September 2023.
(8 marks)
(Total 8 marks
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started