Q.9.

1 EXPECTED CASH COLLECTION FROM SALES

APRIL MAY JUNE
FEB SALES:
230,000 X 10% IN APR 23,000 - -
MAR SALES:
260,000 X 70% IN APR 182,000 26,000
260,000 X 10% IN MAY
APR SALES
300,000 X 20% IN APR 60,000 210,000 30,000
300,000 X 70% IN MAY
300,000 X 10% IN JUN
MAY SALES
500,000 X 20% IN MAY - 100,000 350,000
500,000 X 70% IN JUN
JUN SALES
200,000 X 20% IN JUN - - 40,000
TOTAL CASH COLLECTION 265,000 336,000 420,000

Q.9.2 PRODUCION BUDGET

APRIL MAY JUNE
SALES BUDGET IN UNITS 50,000 75,000 90,000
ADD: DESIRED ENDING INV 7,500 9,000 8,000
TOTAL NEEDED 57,500 84,000 98,000
LESS: BEGINNING INV (5,000) (7,500) (9,000)
REQUIRED PRODUCTION 52,500 76,500 89,000

Q.9.3 DIRECT MATERIAL BUDGET YEAR-2

FIRST QRT SECOND QRT THIRD QRT
PRODUCTION IN BOTTLES 60,000 90,000 150,000
MATERIAL PER BOTTLE (GRAMS) 3 3 3
MATERIAL USAGE BUDGET 180,000 270,000 450,000
ADD: DESIRED ENDING INV 54,000 90,000 60,000
TOTAL NEEDED 234,000 360,000 510,000
LESS: BEGINNING INV (36,000) (54,000) (90,000)
MAT PURCHASED BUDGET IN GRAMS 198,000 306,000 420,000
MAT PURCHASED BUDGET IN K.G. 198 306 420
MATERIAL COST PER K.G. 150 150 150
29,700 45,900 63,000

Q.9.5 MANUFACTURING OVERHEAD BUDGET

A) FIRST QRT SECOND QRT THIRD QRT
BUDGETED DIRECT LABOR HOURS 8,000 8,200 8,500
VAR MFG OVERHEAD @ 3.25 PER DL HR 26,000 26,650 27,625
FIXED MFG OVERHEAD 48,000 48,000 48,000
TOTAL MFG OVERHEAD 74,000 74,650 75,625
 LESS: DEPRECIATION (16,000) (16,000) (16,000)
CASH DISBURSEMENT 58,000 58,650 59,625
B) MFG OVERHEAD RATE = ESTIMATED MFG OVERHEAD / BUDGETED DL HOUR = 297,625 / 32,500 =

Q.9.6 SELLING AND ADMINISTRATIVE EXPENSES BUDGET

FIRST QRT SECOND QRT THIRD QRT
BUDGETED UNIT SALES 15,000 16,000 14,000
VAR SELLING & ADM EXP @2.50 P.U. 37,500 40,000 35,000
FIXED SELLING & ADMN EXP
ADVERTISING EXP 8,000 8,000 8,000
EXECUTIVE SALARIES EXP 35,000 35,000 35,000
DEPRECIATION 20,000 20,000 20,000
INSURANCE 5,000 - 5,000
PROPERTY TAX - 8,000 -
TOTAL FIXED SELLING & ADMN EXP 68,000 71,000 68,000
TOTAL SELLING & ADMN EXP 105,500 111,000 103,000
LESS: DEPRECIATION (20,000) (20,000) (20,000)
CASH DISBURSEMENT 85,500 91,000 83,000

Q.9.7 CASH BUDGET

FIRST QRT SECOND QRT THIRD QRT
BEGINNING CASH BALANCE 20,000 10,000 35,800
ADD: CASH COLLECTION 180,000 330,000 210,000
TOTAL CASH AVAILABLE 200,000 340,000 245,800
TOTAL DISBURSEMENT 260,000 230,000 220,000
EXCESS / (DEFICIENCY) (60,000) 110,000 25,800
FINANCING:
BORROWING 70,000 - -
REPAYMENT - (70,000) -
INTEREST W-1 - (4,200) -
TOTAL FINANCING 70,000 (74,200) -
ENDING CASH BALANCE 10,000 35,800 25,800
W-1: INTEREST EXPENSES
70,000 X 3% X 2 = 4,200 BORROWING ON 1ST JAN & REPAYMENT ON 30TH JUNE =

Q.9.8 BUDGETTED INCOME STATEMENT

SALES (460 UNITS @ 1,950 PER UNIT) 897,000
LESS: COST OF GOODS SOLD (460 UNITS @ 1,575 P.U.) (724,500)
GROSS PROFIT 172,500
LESS: OPERATING EXPENSES:
VAR SELLING & ADM EXP (460 X 75) 34,500
FIXED SELLING & ADMN EXP 105,000
(139,500)
NET OPERATING INCOME 33,000
LESS: INTEREST EXPENSES (14,000)
 NET INCOME 19,000

Q.9.9 BUDGETTED BALANCE SHEET

ASSETS LIABILITIES & SHAREHO
CURRENT ASSETS CURRENT LIABILITIES
CASH N-3 12,200 ACCOUNT PAABLE
ACCOUNTS RECEIVABLE 8,100 TOTAL CURRENT LIABILITIES
SUPPLIES INVENTORY 3,200 SHAREHOLDERS' EQUITY
TOTAL CURRENT ASSETS N-2 23,500 COMMON STOCK
FIXED ASSETS RETAINED EARNINGS
EQUIPMENT 34,000 TOTAL SHAREHOLDERS' EQUITY
LESS: ACCUMULATED DEPRECIATION (16,000)
NET FIXED ASSETS 18,000
TOTAL ASSETS N-1 41,500 TOTAL LIABILITIES & SHAREHOLDERS' EQU
W-1: STATEMENT OF RETAINED EARNINGS
RETAINED EARNINGS BEGINNING 28,000
ADD: NET INCOME 11,500
39,500
LESS: DIVIDENDS (4,800)
RETAINED EARNINGS CLOSSING 34,700
N-1 ASSETS = LIAB + SHE = 41,500
N-2 TOTAL ASSETS - NET FIXED ASSETS = CURRENT ASSETS
N-3 TOTAL CURRENT ASSETS - A/R - SUPPLIES = CASH

Q.9.21 EXPECTED CASH COLLECTION FROM SALES

1) APRIL MAY JUNE
A/R (1ST APR) 120,000 16,000 -
APR SALES
300,000 X 30% IN APR 90,000 180,000 24,000
300,000 X 60% IN MAY
300,000 X 8% JUN
MAY SALES
400,000 X 30% IN MAY - 120,000 240,000
400,000 X 60% IN JUN
JUN SALES
250,000 X 30% IN JUN - - 75,000
TOTAL CASH COLLECTION 210,000 316,000 339,000
2) CASH BUDGET
APRIL MAY JUNE
BEGINNING CASH BALANCE 24,000 22,000 26,000
ADD: CASH COLLECTION (ANS-1) 210,000 316,000 339,000
TOTAL CASH AVAILABLE 234,000 338,000 365,000
LESS: DISBURSEMENT
PAID FOR MERCH. PURCHASED N-1 140,000 210,000 160,000
PAYROLL 20,000 20,000 18,000
 LEASE PAYMENT 22,000 22,000 22,000
ADVERTISING 60,000 60,000 50,000
EQUIPMENT - - 65,000
TOTAL DISBURSEMENT 242,000 312,000 315,000
EXCESS / (DEFICIENCY) (8,000) 26,000 50,000
FINANCING:
BORROWING 30,000 - -
REPAYMENT - - (30,000)
INTEREST - - (1,200)
TOTAL FINANCING 30,000 - (31,200)
ENDING CASH BALANCE 22,000 26,000 18,800
3) IF WE WANT TO MAINTAIN MINIMUM CASH BALANCE OF RS.20,000 WE WILL NOT PAY THE INTEREST
 QUARTER A/R (30 JUN)

23,000 -

208,000 -

300,000 -

450,000 50,000 WORKING: 500,000 - 450,000

40,000 160,000 WORKING: 200,000 - 40,000

1,021,000 210,000

QUARTER JULY
215,000 80,000
8,000
223,000
(5,000)
218,000

YEAR-2 YEAR-3
FOURTH QRT YEAR FIRST QRT
100,000 400,000 70,000
3 3 3
300,000 1,200,000 210,000
42,000 42,000
342,000 1,242,000
(60,000) (36,000)
282,000 1,206,000
282 1,206 1,000 GRAMS = 1 KILOGRAM (FOR EXAMPLE 198,000/1,000 = 198 KG)
150 150
42,300 180,900

FOURTH QRT YEAR

7,800 32,500
25,350 105,625
48,000 192,000
73,350 297,625
 (16,000) (64,000)
57,350 233,625
297,625 / 32,500 = 9.16

FOURTH QRT YEAR

13,000 58,000
32,500 145,000

8,000 32,000
35,000 140,000
20,000 80,000
- 10,000
- 8,000
63,000 270,000
95,500 415,000
(20,000) (80,000)
75,500 335,000

FOURTH QRT YEAR

25,800 20,000
230,000 950,000
255,800 970,000
240,000 950,000
15,800 20,000

- 70,000
- (70,000)
- (4,200)
- (4,200)
15,800 15,800

ST JAN & REPAYMENT ON 30TH JUNE = 2 QUARTERS

ANCE SHEET
LIABILITIES & SHAREHOLDERS' EQUITY
RRENT LIABILITIES
COUNT PAABLE 1,800
OTAL CURRENT LIABILITIES 1,800
AREHOLDERS' EQUITY
MMON STOCK 5,000
TAINED EARNINGS W-1 34,700
OTAL SHAREHOLDERS' EQUITY 39,700

TAL LIABILITIES & SHAREHOLDERS' EQUITY 41,500

QUARTER
136,000

294,000

360,000

75,000
865,000

QUARTER
24,000
865,000
889,000

510,000
58,000
 66,000
170,000
65,000
869,000
20,000

30,000
(30,000)
(1,200)
(1,200)
18,800
NOT PAY THE INTEREST
Q.1 SALES BUDGET
TERRITORY JANUARY FEBRUARY MARCH QUARTER
1 67,500 64,000 70,500 202,000
2 80,000 89,500 86,000 255,500
3 35,000 41,000 29,500 105,500
4 101,000 97,500 112,000 310,500
5 91,500 87,500 110,500 289,500
SALES BUDGET IN UNITS 375,000 379,500 408,500 1,163,000
AVERAGE SALES PRICE 56 56 56 56
SALES BUDGET IN RS. 21,000,000 21,252,000 22,876,000 65,128,000
PRODUCION BUDGET
JANUARY FEBRUARY MARCH QUARTER
SALES BUDGET IN UNITS 375,000 379,500 408,500 1,163,000
ADD: DESIRED ENDING INV 201,500 195,900 206,100 206,100
TOTAL NEEDED 576,500 575,400 614,600 1,369,100
LESS: BEGINNING INV (204,650) (201,500) (195,900) (204,650)
REQUIRED PRODUCTION 371,850 373,900 418,700 1,164,450
DIRECT MATERIAL BUDGET
JANUARY FEBRUARY MARCH QUARTER
PRODUCTION IN UNITS 371,850 373,900 418,700 1,164,450
MATERIAL PER UNIT (UNIT) 1 1 1 1
MATERIAL USAGE BUDGET 371,850 373,900 418,700 1,164,450
ADD: DESIRED ENDING INV 205,645 230,285 119,191 119,191
TOTAL NEEDED 577,495 604,185 537,891 1,283,641
LESS: BEGINNING INV (204,518) (205,645) (230,285) (204,518)
MATERIAL PURCHASED BUDGET IN UNITS 372,978 398,540 307,606 1,079,123
MATERIAL COST PER UNIT 44 44 44 44
16,411,010 17,535,760 13,534,642 47,481,412

Q.2 BUDGETTED INCOME STATEMENT

SALES 795,000
LESS: COST OF GOODS SOLD (100% - 45% = 55%) (437,250)
GROSS PROFIT (45%) 357,750
LESS: OPERATING EXPENSES:
ADMN EXP (260,000 X 40%) 104,000
SELLING EXP (260,000 X 60%) 156,000
(260,000)
PROFIT BEFORE TAX 97,750
LESS: 30% TAX (29,325)
NET INCOME 68,425

Q.3 SALES BUDGET

TERRITORY JANUARY FEBRUARY MARCH QUARTER
1 50 640 810 1,500
2 790 670 805 2,265
 3 910 870 895 2,675
4 820 785 805 2,410
SALES BUDGET IN UNITS 2,570 2,965 3,315 8,850
AVERAGE SALES PRICE 33 33 33 33
SALES BUDGET IN RS. 84,810 97,845 109,395 292,050

Q.4 PRODUCION BUDGET

JANUARY FEBRUARY MARCH TOTAL
SALES BUDGET IN UNITS 3,270 2,965 3,315 9,550
ADD: DESIRED ENDING INV 2,705 2,650 3,000 3,000
TOTAL NEEDED 5,975 5,615 6,315 12,550
LESS: BEGINNING INV (2,975) (2,705) (2,650) (2,975)
REQUIRED PRODUCTION 3,000 2,910 3,665 9,575

Q.5 DIRECT MATERIAL BUDGET

JULY AUGUST SEPTEMBER QUARTER
PRODUCTION IN UNITS 3,685 4,450 4,175 12,310
MATERIAL PER UNIT (UNIT) 2 2 2 2
MATERIAL USAGE BUDGET 7,370 8,900 8,350 24,620
ADD: DESIRED ENDING INV 6,230 5,845 5,600 5,600
TOTAL NEEDED 13,600 14,745 13,950 30,220
LESS: BEGINNING INV (5,159) (6,230) (5,845) (5,159)
MATERIAL PURCHASED BUDGET IN UNITS 8,441 8,515 8,105 25,061
MATERIAL COST PER UNIT 6.25 6.25 6.25 6.25
52,756 53,219 50,656 156,631

Q.6 EXPECTED CASH COLLECTION FROM SALES

APRIL MAY JUNE QUARTER
FEB SALES:
230,000 X 10% IN APR 23,000 - - 23,000
MAR SALES:
260,000 X 70% IN APR 182,000 26,000 208,000
260,000 X 10% IN MAY
APR SALES
300,000 X 20% IN APR 60,000 210,000 30,000 300,000
300,000 X 70% IN MAY
300,000 X 10% IN JUN
MAY SALES
500,000 X 20% IN MAY - 100,000 350,000 450,000
500,000 X 70% IN JUN
JUN SALES
200,000 X 20% IN JUN - - 40,000 40,000
TOTAL CASH COLLECTION 265,000 336,000 420,000 1,021,000

Q.7 EXPECTED CASH COLLECTION FROM SALES

 JULY AUGUST SEPTEMBER QUARTER
CASH SALES 300,000 300,000 400,000 1,000,000
MAY SALES:
530,000 X 15% IN JUL 79,500 - - 79,500
JUN SALES:
560,000 X 50% IN JUL 280,000 84,000 364,000
560,000 X 15% IN AUG
JUL SALES
600,000 X 30% IN JUL 180,000 300,000 90,000 570,000
600,000 X 50% IN AUG
600,000 X 15% IN SEP
AUG SALES
650,000 X 30% IN AUG - 195,000 325,000 520,000
650,000 X 50% IN SEP
SEP SALES
750,000 X 30% IN SEP - - 225,000 225,000
TOTAL CASH COLLECTION 539,500 579,000 640,000 1,758,500
APRIL
216,710
1
216,710
 OCTOBER
4,000
2
8,000

20% COLLECTED IN FEB AND 70% IN MARCH

20% COLLECTED IN MAR

30% COLLECTED IN MAY AND 50% IN JUN

30% COLLECTED IN JUN

SALES BUDGET
TERRITORY JANUARY FEBRUARY
SALES BUDGET IN UNITS 40,000 60,000
AVERAGE SALES PRICE 80 80
SALES BUDGET IN RS. 3,200,000 4,800,000

PRODUCION BUDGET
JANUARY FEBRUARY
SALES BUDGET IN UNITS 40,000 60,000
ADD: DESIRED ENDING INV 18,000 30,000
TOTAL NEEDED 58,000 90,000
LESS: BEGINNING INV (12,000) (18,000)
REQUIRED PRODUCTION 46,000 72,000
DIRECT MATERIAL BUDGET
60,000 x 30% = 18,000
100,000 x 30% = 30,000
50,000 x 30% = 15,000

Next month sale x %age = Ending

Current month sale x %age = beginning

DIRECT MATERIAL BUDGET

JANUARY FEBRUARY
PRODUCTION IN UNITS 46,000 72,000
MATERIAL PER UNIT (POUNDS) 5 5
MATERIAL USAGE BUDGET 230,000 360,000
ADD: DESIRED ENDING INV 36,000 42,500
TOTAL NEEDED 266,000 402,500
LESS: BEGINNING INV (23,000) (36,000)
MATERIAL PURCHASED BUDGET QTY 243,000 366,500

JANUARY FEBRUARY
MATERIAL PURCHASED BUDGET QTY 243,000 366,500
MATERIAL COST PER UNIT 10 10
MATERIAL PURCHASED BUDGET RS. 2,430,000 3,665,000

360,000 X 10% = 36,000

425,000 X 10% = 42,500
280,000 X 10% = 28,000

COLLECTION BUDGET
JANUARY FEBRUARY
SALES BUDGET IN RS. 3,200,000 4,800,000
ACCOUNTS RECEIVABLE 1/1 65,000
JAN SALES:
3,200,000 X 70% 2,240,000
3,200,000 X 30% 960,000
FEB SALES:
4,800,000 X 70% 3,360,000
4,800,000 X 30%
MAR SALES:
8,000,000 X 70%
TOTAL COLLECTION 2,305,000 4,320,000
 MARCH QUARTER
100,000 200,000
80 80
8,000,000 16,000,000

MARCH QUARTER NOTE 30% OF FOLLOWING MONTH SALES

100,000 200,000 WORKING
15,000 15,000 SALES QUANTITY FOR APRIL = 50,000
115,000 215,000
(30,000) (12,000)
85,000 203,000

March ending = Quarter ending

January beginning = Quarter beginning

%age = Ending
e x %age = beginning

MARCH QUARTER WORKING FOR PRODUCTION NEED FOR APRIL

85,000 203,000 SALES QUANTITY 50,000
5 5 ADD: DESIRED ENDING INV 21,000
425,000 1,015,000 TOTAL NEEDED 71,000
28,000 28,000 LESS: BEGINNING INV (15,000)
453,000 1,043,000 REQUIRED PRODUCTION 56,000
(42,500) (23,000) MATERIAL PER UNIT (UNIT) 5
410,500 1,020,000 MATERIAL USAGE BUDGET 280,000

MARCH QUARTER
 410,500 1,020,000
10 10
4,105,000 10,200,000

MARCH QUARTER
8,000,000 16,000,000
65,000

2,240,000
960,000

3,360,000
1,440,000 1,440,000

5,600,000 5,600,000
7,040,000 13,665,000
NTH SALES

FOR APRIL

30% OF MAY SALES

70,000 X 30%