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The company is proposing to produce just two product lines: a budget student chair and a high-quality director chair in the last four months of
The company is proposing to produce just two product lines: a budget student chair and a high-quality director chair in the last four months of 2020. The company made the following predictions for their business for this period. Selling price per student chair $120 Selling price per director chair $280- Budgeted sales in units Number of chairs September October November December Studente 2004 2804 330+ 400 Director 40+ 432 452 50+ Budegted Costs of Production Cost per chair Raw Materials Direct Labour Factory Overheadele Student Chair 40+ 10- 10+ Director Chaire 100+ 20- 20+ t Office operating expenses are $10,000 per month Inventory Policy All the Raw Materials required for the budgeted sales are delivered in the month before production begins.' t i. Payments Policies + Raw Materials are paid for on the 20th of the month following delivery of the goods. ii. ii. Expenses are paid for in the month the cost is incurred. Note Factory Overheads consist of 10% depreciation Predicted Accounts Receivable collections 80% of sales are collected in the month of the sale + 25% are collected in the month following the sale 1% are expected to become bad debts. t You are required to: Prepare a cash budget for Isu Enterprises Ltd for November 2020. All your working must be shown
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