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Mac C3

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The document contains three answers related to flexible budgeting. Answer 1 contains cash inflow and outflow details by quarter. Answer 2 shows a flexible budget with different capacity levels. Answer 3 presents a flexible budget for a department showing costs at various sales levels.

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Mac C3

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Naira
19 views3 pages
The document contains three answers related to flexible budgeting. Answer 1 contains cash inflow and outflow details by quarter. Answer 2 shows a flexible budget with different capacity levels. Answer 3 presents a flexible budget for a department showing costs at various sales levels.

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MAC C3

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The document contains three answers related to flexible budgeting. Answer 1 contains cash inflow and outflow details by quarter. Answer 2 shows a flexible budget with different capacity levels. Answer 3 presents a flexible budget for a department showing costs at various sales levels.

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19 views3 pages

Mac C3

Uploaded by

Naira
The document contains three answers related to flexible budgeting. Answer 1 contains cash inflow and outflow details by quarter. Answer 2 shows a flexible budget with different capacity levels. Answer 3 presents a flexible budget for a department showing costs at various sales levels.

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Answer 1.

Particular Quarter

1 2 3 4 Total

(A) Cash Inflow:

Collection from Debtors

(i) From prior quarter (1/3 of sales ) 3,000 2,500 3,500 6,000 15,000
(ii) From current quarter (2/3 of sales ) 5,000 7,000 12,000 7,000 31000

Total 8,000 9,500 15,500 13,000 46,000

(B) Cash Outflows:


Production costs 7,000 10,000 8,000 8,500 33,500
Selling, administration and other costs 1,000 2,000 2,900 1,600 7,500
Plant and other fixed assets purchased 100 1,100 2,100 2,100 5,400

Total 8,100 13,100 13,000 12,200 46,400

(C) Surplus (deficiency) (100) (3,600) 2,500 800 (400)

Beginning balance 650 550 500 500 650

Ending balance (indicated) 550 (3,050) 3,000 1,300 250

Borrowing required

(Deficiency + minimum cash required ) 3,550 3,550

(Repayments ) made

( Balance – minimum cash required ) (2,500) (800) (3,300)

Ending balance ( actually now estimated ) 550 500 500 500 500

(B) Loan outstanding = Rs 35,50,000 – 33,00,000 = 2,50,000


Answer 2. Flexible Budget

Capacity Levels 100% 75% 50%

Output (units) 6,400 4,800 3,200

Fixed Costs Rs 20,688 Rs 20,688 Rs 20,688

Variable Costs

Direct Materials @ Rs 7.70 per unit 49,280 36,960 24,640

Direct Labour @ Rs 16 per unit 1,02,400 76,800 51,200

Power @ Rs 0.225 per unit 1,440 1,080 720

Repair etc. @ Rs 0.265625 per unit 1,700 1,275 850

Miscellaneous @ Rs 0.084375 per unit 540 405 270

Total Cost 1,76,048 1,37,208 98,368

Sales @ Rs 40 per unit 2,56,000 1,92,000 1,28,000

Gross Profit 79,952 54,792 29,632

Administration Expenses 4,500 4,500 4,500

Net Profit 75,452 50,292 25,132


Answer 3. Flexible Budget of Department of Company X

80% 90% 100% 110%

Sales 6,00,000 6,75,000 7,50,000 8,25,000

Administration Costs:

Office Salaries ( Fixed ) 90,000 90,000 90,000 90,000

General Expenses ( 2% of Sales ) 12,000 13,500 15,000 16,500

Depreciation ( Fixed ) 7,500 7,500 7,500 7,500

Rent and rates ( Fixed ) 8,750 8,750 8,750 8,750

(A) Total Administration 1,18,250 1,19,750 1,21,250 1,22,750

Selling Costs:

Salaries ( 8% of sales ) 48,000 54,000 60,000 66,000

Travelling Expenses ( 2% of sales ) 12,000 13,500 15,000 16,500

Sales office ( 1% of sales) 6,000 6,750 7,500 8,250

General Expenses ( 1% of sales ) 6,000 6,750 7,500 8,250

(B) Total Selling Costs 72,000 81,000 90,000 99,000

Distribution Costs:

Wages ( Fixed ) 15,000 15,000 15,000 15,000

Rent ( 1% of sales ) 6,000 6,750 7,500 8,250

Other Expenses ( 4% of sales ) 24,000 27,000 30,000 33,0000

(C) Total Distribution Costs 45,000 48,750 52,500 56,250

Total Costs ( A + B + C ) 2,35,250 2,49,500 2,63,750 2,78,000

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