Ronstadt Limited's budget for the four months from January to April includes the following data: 1. Sales S000 615 636 690 Materials S000 115.0 120.0 135.0 Manth Wages S000 30 Overheads $000 360 January February March April 33 36 390 420 425 684 130.0 40 2. Ore-third of salesrevenue is received one month after sale and the remainder is received two months after sale. The sales in the previous two months were: November $600 000; Decenber $540 000. 3. One-quarter of purchases of materials are paid for in the month of purchase. The remainder are paid for two months later. Purchases in the previous two months were: November $108 000; December $106 000. 4. Two-thirds of the wages are paid in the month in which they are eamed, and the balance is paid in the following manth. The wages for the previous December amounted to $30 000. 5. Ore-half of the overhead expenditure is paid in the month in which it is incurred, and the balance is paid in the following month. The overheads for the previaus December were $380 000. 6. Old machinery will be sold for $4000 in April. New machinery will be purchased in March for $90 000 but only one-half of the price will be paid in that month. The balance will be paid in August. 7. Ronstadt Limited has an overdraft of $63 000 at the bank at 31 December.
Ronstadt Limited's budget for the four months from January to April includes the following data: 1. Sales S000 615 636 690 Materials S000 115.0 120.0 135.0 Manth Wages S000 30 Overheads $000 360 January February March April 33 36 390 420 425 684 130.0 40 2. Ore-third of salesrevenue is received one month after sale and the remainder is received two months after sale. The sales in the previous two months were: November $600 000; Decenber $540 000. 3. One-quarter of purchases of materials are paid for in the month of purchase. The remainder are paid for two months later. Purchases in the previous two months were: November $108 000; December $106 000. 4. Two-thirds of the wages are paid in the month in which they are eamed, and the balance is paid in the following manth. The wages for the previous December amounted to $30 000. 5. Ore-half of the overhead expenditure is paid in the month in which it is incurred, and the balance is paid in the following month. The overheads for the previaus December were $380 000. 6. Old machinery will be sold for $4000 in April. New machinery will be purchased in March for $90 000 but only one-half of the price will be paid in that month. The balance will be paid in August. 7. Ronstadt Limited has an overdraft of $63 000 at the bank at 31 December.
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 5P
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