Gloves Unlimited is a Ryanair subsidiary that specialises in industrial gloves, some of which are used by Ryanair cabin staff. You are required to prepare a cash budget for Gloves Unlimited for the period January to June, using the information given below.    Months Total Sales Materials purchased on credit Wages Production Overheads Overheads: Selling & Distribution January 20,000 20,000 4,000 3,200   800 February 22,000 14,000 4,400 3,300   900 March 28,000 14,000 4,600 3,400   900 April 36,000 22,000 4,600 3,500 1,000 May 30,000 20,000 4,000 3,200    900 June 40,000 25,000 5,000 3,600 1,200   Additional information                                                                                                                      The cash balance on 1st January was $10,000. Machinery is to be installed @ $20,000 on credit to be paid in two equal instalments in March and April. Sales commission @ 5% on total sales is to be paid one month following the actual sales. $12,000 will be received in March from investments. Period of credit allowed by suppliers is 2 months. Period of credit allowed to customers is one month. Lag in payment of overheads is one month. Lag in payment of wages is half a month. Cash sales are 50% of total sales Show all your workings.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
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Gloves Unlimited is a Ryanair subsidiary that specialises in industrial gloves, some of which are used by Ryanair cabin staff. You are required to prepare a cash budget for Gloves Unlimited for the period January to June, using the information given below. 

 

Months

Total Sales

Materials purchased on credit

Wages

Production Overheads

Overheads:

Selling & Distribution

January

20,000

20,000

4,000

3,200

  800

February

22,000

14,000

4,400

3,300

  900

March

28,000

14,000

4,600

3,400

  900

April

36,000

22,000

4,600

3,500

1,000

May

30,000

20,000

4,000

3,200

   900

June

40,000

25,000

5,000

3,600

1,200

 

Additional information                                                                                                                    

 The cash balance on 1st January was $10,000.

Machinery is to be installed @ $20,000 on credit to be paid in two equal instalments in March and April.

Sales commission @ 5% on total sales is to be paid one month following the actual sales.

$12,000 will be received in March from investments.

Period of credit allowed by suppliers is 2 months.

Period of credit allowed to customers is one month.

Lag in payment of overheads is one month.

Lag in payment of wages is half a month.

Cash sales are 50% of total sales

Show all your workings.                                 

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