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ASSIGNMENT QUESTION

QUESTION/TASK 1(50%):

Task 1a: CLO3

OBJECTIVE: The purpose of this assignment is to enable learners to understand an organisation's financial goals through the preparation of operating, financial, and cash budgets that together integrate into a business plan

REQUIREMENT:

Budgets and Budgetary Controls

Question

BulatRimba Company manufactures and sells plastic tires for automated cleaning machines. It is completing its financial plans for 2021 and needs assistance in the budgeting phase. The following information is available:

BulatRimba Company Balance Sheet

December 31, 2021

Assets

Current assets:

Cash

Account Receivables (net)

Property, plant and equipment: Land

Buildings and equipment Less accumulated equipment Total assets

Liabilities and Stockholders' Equity Current liabilities:

Accounts payable Stockholders' equity:

Capital stock

Retained earnings Total liabilities and stockholders'

equity

$200,000 294,000

$100,500

$494,000

$350,000 (118,000)

232.000

332,500 $826.500

$132,000

$400,000 294,500

694,500 $826.500

Selling price for each wheel is $30 per unit. Budgeted sales unit for 2022 are:

First quarter Second quarter

Third quarter

15,000 16,000

18,000

BulatRimba will have no finished goods (wheel) and materials (plastic and rims) inventories: at the beginning of the year. Management desires 5,000 kg of plastic at the end of the first quarter and 6,000 kg at the end of the second quarter. Each wheel takes 2kg of plastic. BulatRimba should have 2,000 rims at the end of the first quarter and 2,500 at the end of the second quarter. Finished inventory should total 1,000 wheels at the end of the first quarter and 1,500 at the end of the second quarter.

Plastic

Rims

Direct Materials

Direct Labour 0.5 hour

2kg @ $3 1 each @ $2

Variable factory overhead is applied at the rate of $3 per direct labour hour for each finished unit. Fixed factory overhead is $170,000 per quarter, including non-cash, expenditures of $54,000 and is allocated on the total number of units completed direct labour averages $20 per hour.

Required:

For the first quarter of 2022, prepare the following:

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