budgets

Question 1

what are the two rows in a sales budget

Answer 1

sales units

sales value

Question 2

what are the 4 rows in a production budget

Answer 2

sales in units
opening inventory
closing inventory
production

Question 3

how do you work our production in a production budget

Answer 3

sales in units - opening inventory + closing inventory

Question 4

what are the 5 rows in a purchases budget

Answer 4

sales in units
opening inventory
closing inventory
purchases 
purchases cost

Question 5

how do you work out purchases in a purchases budget

Answer 5

sales in units - opening inventory + closing inventory

Question 6

how do you work our purchases cost in a purchases budget

Answer 6

purchases x purchase cost per unit

Question 7

what are the 7 rows in a trade receivables budget ( if receivables pay in 1 or 2 months credit )

Answer 7

opening receivables
credit sales
1 month credit
2 month credit
discount allowed 
bad debt
closing receivables

Question 8

how do you work out closing receivables

Answer 8

opening receivables + credit sales - everything else

Question 9

what are the benefits of budgets

Answer 9

planning and forecasting 
monitoring
control
decision making
co-ordination and communication

Question 10

what are the limitations of budgets

Answer 10

sales figures are hard to forecast accurately
the unit rate for expenses may be different to what was expected
unreasonable budgets can be demotivating for employees
they can be inflexible