Luxury Goods Pty Ltd is preparing a master budget for the quarter ending 30 September 2022 and has compiled the following data. The firm sells a single product at a price of $60 per unit. The sales forecast (in units) prepared by the marketing department for the quarter ending 30 June 2022 and the first 7 months of the next financial year is as follows. 40% of the sales are collected in the month of sale, 40% are collected in the following month, and 20% are collected in the second month following the sale. The beginning inventories on 1 July 2022 will be 10 800 units of finished goods and no raw materials. The ending finished goods inventory should equal 20% of the sales requirements for the next 3 months, and the raw materials ending inventory should equal 40% of the next month’s production. 80% of the material purchases are paid in the quarter of purchase and 20% are paid in the following quarter. The amount owing for purchases at 1 July 2022 is $196 800. Variable selling expenses are 5% of sales. Administrative expenses are $126 000 per quarter, of which $20 000 represents depreciation expense and $96 000 is wages. Fixed selling expenses are $36 000 each quarter. All selling and administrative expenses are paid in the quarter in which they are incurred. The production requirements are below. The direct materials are purchased for $8 a kilogram. The direct labour wage rate is $24 an hour. The factory overhead cost is $154 000 per month and is paid in the month incurred (except for depreciation of $28 000). The 1 July 2022 cash balance is expected to be $40 320. Required: (Do the calculation in excel) Prepare a sales budget by month for the period May to September 2022. Determine estimated cash collections from receivables for the first quarter of the financial year ending 30 September 2022. Calculate the number of units to be produced in the first quarter of the financial year ending 30 September 2022. Prepare a direct materials budget for the first quarter of the financial year ending 30 September 2022. Prepare a cash budget for the first quarter of the financial year ending 30 September 2022 including any necessary schedules. Prepare a budgeted income statement for the first quarter of the financial year ending 30 September 2022.
Luxury Goods Pty Ltd is preparing a master budget for the quarter ending 30 September 2022 and has compiled the following data. The firm sells a single product at a price of $60 per unit. The sales forecast (in units) prepared by the marketing department for the quarter ending 30 June 2022 and the first 7 months of the next financial year is as follows. 40% of the sales are collected in the month of sale, 40% are collected in the following month, and 20% are collected in the second month following the sale. The beginning inventories on 1 July 2022 will be 10 800 units of finished goods and no raw materials. The ending finished goods inventory should equal 20% of the sales requirements for the next 3 months, and the raw materials ending inventory should equal 40% of the next month’s production. 80% of the material purchases are paid in the quarter of purchase and 20% are paid in the following quarter. The amount owing for purchases at 1 July 2022 is $196 800. Variable selling expenses are 5% of sales. Administrative expenses are $126 000 per quarter, of which $20 000 represents depreciation expense and $96 000 is wages. Fixed selling expenses are $36 000 each quarter. All selling and administrative expenses are paid in the quarter in which they are incurred. The production requirements are below. The direct materials are purchased for $8 a kilogram. The direct labour wage rate is $24 an hour. The factory overhead cost is $154 000 per month and is paid in the month incurred (except for depreciation of $28 000). The 1 July 2022 cash balance is expected to be $40 320. Required: (Do the calculation in excel) Prepare a sales budget by month for the period May to September 2022. Determine estimated cash collections from receivables for the first quarter of the financial year ending 30 September 2022. Calculate the number of units to be produced in the first quarter of the financial year ending 30 September 2022. Prepare a direct materials budget for the first quarter of the financial year ending 30 September 2022. Prepare a cash budget for the first quarter of the financial year ending 30 September 2022 including any necessary schedules. Prepare a budgeted income statement for the first quarter of the financial year ending 30 September 2022.
Chapter5: Operating Activities: Purchases And Cash Payments
Section: Chapter Questions
Problem 2.1C
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Luxury Goods Pty Ltd is preparing a
- The firm sells a single product at a price of $60 per unit. The sales
forecast (in units) prepared by the marketing department for the quarter ending 30 June 2022 and the first 7 months of the next financial year is as follows.
- 40% of the sales are collected in the month of sale, 40% are collected in the following month, and 20% are collected in the second month following the sale.
- The beginning inventories on 1 July 2022 will be 10 800 units of finished goods and no raw materials. The ending finished goods inventory should equal 20% of the sales requirements for the next 3 months, and the raw materials ending inventory should equal 40% of the next month’s production.
- 80% of the material purchases are paid in the quarter of purchase and 20% are paid in the following quarter. The amount owing for purchases at 1 July 2022 is $196 800.
- Variable selling expenses are 5% of sales. Administrative expenses are $126 000 per quarter, of which $20 000 represents
depreciation expense and $96 000 is wages. Fixed selling expenses are $36 000 each quarter. All selling and administrative expenses are paid in the quarter in which they are incurred.
- The production requirements are below.
The direct materials are purchased for $8 a kilogram. The direct labour wage rate is $24 an hour. The
- The 1 July 2022 cash balance is expected to be $40 320.
Required: (Do the calculation in excel)
- Prepare a sales budget by month for the period May to September 2022.
- Determine estimated cash collections from receivables for the first quarter of the financial year ending 30 September 2022.
- Calculate the number of units to be produced in the first quarter of the financial year ending 30 September 2022.
- Prepare a direct materials budget for the first quarter of the financial year ending 30 September 2022.
- Prepare a
cash budget for the first quarter of the financial year ending 30 September 2022 including any necessary schedules. - Prepare a
budgeted income statement for the first quarter of the financial year ending 30 September 2022.
Transcribed Image Text:Per unit
Direct materials
1.1 kg
Direct labour
0.5 hour
Transcribed Image Text:April
May
June
July
August
September
October
November
December
January
Number of units
28 800
28 800
30 000
31 200
33 600
33 600
37 200
38 400
43 200
57 600
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Prepare a direct materials budget for the first quarter of the financial year ending 30 September 2022.
Prepare a cash budget for the first quarter of the financial year ending 30 September 2022 including any necessary schedules.
Prepare a budgeted income statement for the first quarter of the financial year ending 30 September 2022.
Solution
by Bartleby ExpertFollow-up Question
- Prepare a direct materials budget for the first quarter of the financial year ending 30 September 2022.
- Prepare a
cash budget for the first quarter of the financial year ending 30 September 2022 including any necessary schedules. - Prepare a
budgeted income statement for the first quarter of the financial year ending 30 September 2022.
Solution
by Bartleby ExpertFollow-up Question
how about these 3 requirments
Prepare a direct materials budget for the first quarter of the financial year ending 30 September 2022.
Prepare a
Prepare a
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by Bartleby ExpertKnowledge Booster
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