15 the following data are available in a

Info icon This preview shows pages 211–214. Sign up to view the full content.

View Full Document Right Arrow Icon
15. The following data are available in a manufacturing company for a yearly period: Fixed Expenses: Rs. Lakhs Wages & salaries 9.5 Rent, rates & taxes 6.6 Depreciation 7.4 Sundry administration expenses 6.5 Semi-variable expenses (At 50% of capacity): Maintenance and repairs 3.5 Indirect labour 7.9 Sales department salaries, etc 3.8 Sundry administration salaries 2.8 Variable expenses (At 50% of capacity): Materials 21.7 Labour 20.4 Other expenses 7.9 Total Cost 98.0 Assume that the fixed expenses remain constant for all levels of production; semi-variable expenses remain constant between 45% and 65% of capacity, increasing by 10% between 65% and 80% capacity and by 20% between 80% and 100% capacity.
Image of page 211

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
205 Sales at various level are: 50% capacity Rs. Lakhs 100 75% capacity Rs. Lakhs 150 60% capacity Rs. Lakhs 120 90% capacity Rs. Lakhs 180 100% capacity Rs. Lakhs 200 Prepare a flexible budget for the year and forecast the profit at 60%, 75%, 90% and 100% of capacity. 16. A company expects to have Rs.37500 cash in hand on 1 st April, and requires you to prepare an estimate of cash position during the three months, April, May & June. The following information is supplied to you: Sales (Rs.) Purchases (Rs.) Wages (Rs.) Factory expenses (Rs.) Office expenses (Rs.) Selling expenses (Rs.) February 75000 45000 9000 7500 6000 4500 March 84000 48000 9750 8250 6000 4500 April 90000 52000 10500 9000 6000 5250 May 120000 60000 13500 11250 6000 6570 June 135000 60000 14250 14000 7000 7000 Other Information: 1. Period of credit allowed by suppliers 2 months 2. 20% of sales is for cash and period of credit allowed to customers for credit is one month. 3. Delay in payment of all expenses 1 month 4. Income tax of Rs.57500 is due to be paid on June 15 th . 5. The company is to pay dividends to shareholders and bonus to workers of Rs.15000 and Rs.22500 respectively in the month of April. 6. Plant has been ordered to be received and paid in May. It will cost Rs.120000. 15.4 REVISION POINTS 1. Sales Budget The budget which estimates total sales in terms of items, quantity, value, periods, areas, etc is called Sales Budget. 2. Production Budget It estimates quantity of production in terms of items, periods, areas, etc. It is prepared on the basis of Sales Budget. 3. Cost of Production Budget This budget forecasts the cost of production 4. Purchase Budget This budget forecasts the quantity and value of purchase required for production. 5. Personnel Budget The budget that anticipates the quantity of personnel required during a period for production activity is known as Personnel Budget
Image of page 212
206 6. Research Budget This budget relates to the research work to be done for improvement in quality of the products or research for new products. 7. Capital Expenditure Budget This budget provides a guidance regarding the amount of capital that may be required for procurement of capital assets during the budget period. 8. Cash Budget This budget is a forecast of the cash position by time period for a specific duration of time..
Image of page 213

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 214
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern