A company has 1,000 units of finished goods held in stock at the start of the month. It produces a further 4,000 units during the month and sells 4,200. How many units are in store at the end of the month?

Question two

The sales budget for the Business Solutions Company for the first six months of the year is;

• January 12,000

• February 13,000

• March 14,000

• April 13,500

• May 12,600

• June 11,100

There are no debtors at the start of January. One month’s credit is allowed to customers.

What is the budgeted cash received in each month?

Question three

• Trade creditors at the start of January are 12,500.

They are all paid during January. During the month, goods costing 18,000 are purchased, and at the end of January there is an amount of 13,600 owing to trade creditors.

State the amount of cash paid to trade creditors during January.

Question four

• The cost of indirect materials in any month is 40% variable (varying with direct labour hours) and 60% fixed.

The total cost of the indirect materials during the month of March was budgeted at 500.

During the month of April, it is expected that the direct labour hours will be 20% higher than during March.

What should be budgeted for the cost of indirect materials in April?

Question five

A manufacturing company makes product F, for which the variable overhead cost is GHS2 per unit.

Fixed costs are budgeted at GHS450,000 for the year, of which £130,000 are depreciation charges.

The remaining fixed costs incurred at a constant rate every month, with the exception of factory costs, which are GHS80,000 each year, payable 50% in December and 50% in June. With the exception of rental costs, 10% of overhead expenses are paid for in the month in which they occur and the remaining 90% are paid in the following month. The budgeted production quantities of products F are: Month Units September 40,000 October 60,000 November 50,000 December 30,000

Prepare a month by month cash flow forecast for overhead payments in the period October December,

Question six

A business has estimated that 10% of its sales will be cash sales, and the remainder credit sales.

It also estimated that 50% of receivables will be paid in the month following sale, 30% two months after sales, 15% three months after sales.

Total sales figure as follows:

Month Sales (GHS)

October 80,000

November 60,000

December 40,000

January 50,000

February 60,000

March 90,000

Prepare a month by month forecast of cash receipts from sales for the months January – March

Answer rating: 100% (QA)

Question 1 closing stock on month end Units Opening stock 100000 Add production during the month 400000 Total units available for sale 600000 Less units sold 420000 Closing stock at month end 180000 Q... View the full answer