Outhouse Limited manufactures and sells garden sheds for $1045. At the end of June, the following...

Transcribed Image Text:

Outhouse Limited manufactures and sells garden sheds for $1045. At the end of June, the following actual and expected sales numbers were provided: Each shed requires 30 square metres of sheet metal at a cost of $24 per square metre, and requires three hours of direct labour to be manufactured. The direct labour cost is $18 per hour. The finished goods ending inventory for each month is required to be 36% of next month's forecast sales, while the raw materials ending inventory for each month is required to be 40% of the requirements for next month's budgeted production. Finished goods and raw materials inventories at the end of June are 150 units and 3,100 square metres respectively. The business collects 30% of receivables in the month of sale and the remainder in the following month. 45% of the cost of raw materials is paid in the month of purchase and the remainder in the following month. The amount owing for purchases at the beginning of July is $50,000. 1) (3 marks) In addition to raw materials and direct labour, the business has the following monthly expenses: Variable selling expenses of 5% of sales; fixed administration expenses of $12,000 including depreciation of $2,000 and wages of $9,500; and factory overheads of $20,000 including depreciation of $5,000. The business pays all cash amounts owing for these expenses in the month incurred. Outhouse Limited had a cash at bank balance of $100,000 at the end of June. Required: 2) (10 marks) 3) (10 marks) 4) (10 marks) June (actual) July August September October 5) (5 marks) Sales (units) 400 450 300 400 700 ហ 6) (12 marks) Prepare a sales budget by month for the period June to September and present it in section 1, part B of the template. Prepare a schedule of cash collections by month for the period July to September and present it in section 2, part B of the template. Prepare a production budget by month for the period July to September and present it in section 3, part 8 of the template. Ensure that all necessary items including row headings are added to the template. Prepare a raw materials budget for July and August and present it in section 4, part B of the template. Ensure that all necessary items including row headings are added to the template. Prepare a direct labour budget for July and August and present it in section 5, part B of the template. Ensure that all necessary items including row headings are added to the template. Prepare the cash budget for July and present it in section 6, part B of the template. Ensure that all necessary items including row headings are added to the template. Outhouse Limited manufactures and sells garden sheds for $1045. At the end of June, the following actual and expected sales numbers were provided: Each shed requires 30 square metres of sheet metal at a cost of $24 per square metre, and requires three hours of direct labour to be manufactured. The direct labour cost is $18 per hour. The finished goods ending inventory for each month is required to be 36% of next month's forecast sales, while the raw materials ending inventory for each month is required to be 40% of the requirements for next month's budgeted production. Finished goods and raw materials inventories at the end of June are 150 units and 3,100 square metres respectively. The business collects 30% of receivables in the month of sale and the remainder in the following month. 45% of the cost of raw materials is paid in the month of purchase and the remainder in the following month. The amount owing for purchases at the beginning of July is $50,000. 1) (3 marks) In addition to raw materials and direct labour, the business has the following monthly expenses: Variable selling expenses of 5% of sales; fixed administration expenses of $12,000 including depreciation of $2,000 and wages of $9,500; and factory overheads of $20,000 including depreciation of $5,000. The business pays all cash amounts owing for these expenses in the month incurred. Outhouse Limited had a cash at bank balance of $100,000 at the end of June. Required: 2) (10 marks) 3) (10 marks) 4) (10 marks) June (actual) July August September October 5) (5 marks) Sales (units) 400 450 300 400 700 ហ 6) (12 marks) Prepare a sales budget by month for the period June to September and present it in section 1, part B of the template. Prepare a schedule of cash collections by month for the period July to September and present it in section 2, part B of the template. Prepare a production budget by month for the period July to September and present it in section 3, part 8 of the template. Ensure that all necessary items including row headings are added to the template. Prepare a raw materials budget for July and August and present it in section 4, part B of the template. Ensure that all necessary items including row headings are added to the template. Prepare a direct labour budget for July and August and present it in section 5, part B of the template. Ensure that all necessary items including row headings are added to the template. Prepare the cash budget for July and present it in section 6, part B of the template. Ensure that all necessary items including row headings are added to the template.