Management

Question 1

What is the layout for cash budgets?

Answer 1

Inflows:
Bank loan
Cash sales
Cash from receivables
Total inflows

Outflows:
Purchases
Wages
Purchases of nca
Loan repayment
Dividends paid
Other expenses
Total outflows

Net cash flows
Opening balance
Closing balance

Question 2

What is the layout for sales budget?

Answer 2

Month 1 Month 2 Total
Sales in units
Sales in revenue

Question 3

What is the layout for production budget?

Answer 3

Month1 Month2 Total
Sales
(Opening)
Closing
=Production

Question 4

What is the layout for a purchase budget?

Answer 4

Month1 Month2 Total
Sales
(Opening)
Closing
Purchases
Purchase costs

Question 5

What is the layout for labour budget?

Answer 5

Month1 Month2 Total
Units produced
Labour hours
Labour cost

Question 6

Formula for contribution (2) and break even (1)?

Answer 6

Contribution per unit=
selling price- variable cost

Total contribution=
Contribution per unit x no. units sold

Break even=
fixed costs/ contribution per unit

Question 7

Formula for margin for safety?

Answer 7

Actual level of sales- break even point

Question 8

Formula for target profit?

Answer 8

(Fixed costs + target profit) /
contribution per unit

Question 9

Formula for all variances

Answer 9

Sales price, material price and labour rate = AQ( SP-AP)

Sales volume, material usage, labour efficiency= SP(SQ-AQ)