Production costs budget april may june july august

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Production Costs BudgetAprilMayJuneJulyAugustSeptemberTotalDirect Materials£7,500£7,500£7,500£7,500£7,500£7,500£45,000Direct Labour£6,000£6,000£6,000£6,000£6,000£6,000£36,000ProductionOverheads£2,500£2,500£2,500£2,500£2,500£2,500£15,000£16,000£16,000£16,000£16,000£16,000£16,000£96,000Cash BudgetAprilMayJuneJulyAugustSeptemberTotalOpening Cash(£3,000)(£19,500)(£34,000)(£37,500)(£40,000)(£41,500)(£3,000)Add ReceiptsDebtors£10,000£14,000£20,000£22,000£24,000£26,000£116,000£10,000£14,000£20,000£22,000£24,000£26,000£116,000
Less PaymentsPayment for Goods£8,000£10,000£5,000£6,000£7,000£8,000£44,000Non-productionexps£10,000£10,000£10,000£10,000£10,000£10,000£60,000Direct Labour£6,000£6,000£6,000£6,000£6,000£6,000£36,000ProductionOverhead£2,500£2,500£2,500£2,500£2,500£2,500£15,000£26,500£28,500£23,500£24,500£25,500£26,500£155,000Cashflow(£16,500)(£14,500)(£3,500)(£2,500)(£1,500)(£500)(£39,000)Closing Cash(£19,500)(£34,000)(£37,500)(£40,000)(£41,500)(£42,000)(£42,000)P&LSales150,000.00Cost of Sales-96,000.00Gross Profit54,000.00Less ExpensesDepreciation-10,000.00Expenses-60,000.00-70,000.00Net Profit / (Loss)-16,000.00Balance SheetCostDepnNBVFixed Assets100,000.00-10,000.0090,000.00Current AssetsDebtors58,000.00Stock of raw materials9,000.00stock of finished goods13,000.0080,000.00Current liabilitiesCreditors-19,000.00Bank overdraft-42,000.00-61,000.00Net Current Assets19,000.00Total Net Assets109,000.00
Share Capital andReservesShare Capital100,000.00Opening P&L25,000.00Loss for year-16,000.00Total Shareholders’ Funds109,000.00Conclusions and short management report.The business plans and policies which are prepared by the managers of the business concern for a certainperiod and presented in the form of monetary terms is known as budget .Therefore budget is a writtenfuture working plan at present and prepared by the experienced persons on the basis of the facts for futureforecasting and the main objective is to give guidance for achieving the predetermined targets.There are various types of budgets but the most useful budgets are as follows:1)Sales budget: sales budget is the most important budget. In the sales budget, the total sales areestimated for a definite future period, in which sales are presented in quantities as well as inmoney .On the basis of sales budget, other budgets such as production budget, are prepared. Inthis case number of units sold in each month from April to September is 400 and if we divide thesales with the number of units sold then the per unit sales comes to be 50 per unit.2)Debtor’s budget: Debtor budget has been prepared to know how much cash has been receivedfrom the debtors. In this case the amount from debtors will be collected after a period of twomonths which indicates that management should take steps to collect the amount from credit salesearlier. As a result of collecting cash from debtors after two months the closing balance of debtorsbecome£58,000.3)Creditor’s budget: Creditors budget has been prepared to know how much amount has been paidto creditor’s .In this case amount has been paid to creditors after two months which is a good signfor the company. The main reason for this is that the suppliers of raw material have faith in thecompany that they will pay their amount after two months. In this case closing creditors comes outto be£19,000.4)Raw material Budget: raw material budget has been prepared to forecast the quantity, quality andcost of material used in production. In this case 500 units have been produced in each month at therate of 15 per unit. Therefore in each month 7,500 value of raw material has been used inproduction. At the end of September 9,000 value of material remained unused which becomes theasset for the company and this material can be used by the company in the next month.

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Term
Winter
Professor
Ondingo
Tags
Business, Management, Balance Sheet, Share capital, Scorekeeping

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