Question

1. (20 Marks Quolala is a merchandising company. Quolala expects unit sales for the coming year as follows: March 15,000 23.000 April 31,000 May 47,000 June 56,000 July

Answer 1

Answer with working given below

Purchase Budget July 56,000 Budgeted Sales Add: Closing inventory April 23,000 9,300 32,300 May 31,000 14,100 45,100 9,300 35,800 June 47,000 16,800 63,800 14,100 49,700 Quarter 101,000 16,800 117,800 6,900 110,900 Less: Opening Inventory Purchase Budget 56,000 16,800 39,200 25,400 a) Expected units to purchase in June is 49,700 units Sales Budget Budgeted Sales Budgeted Selling price Budgeted Sales (value) March 15,000 $23 $345,000 April 23,000 $23 $529,000 May June Quarter 31,000 47,000 101,000 $23 $23 $713,000 $1,081,000 $2,323,000 b) Expected Cash Collection April 69,000 370,300 March Month April Month May Month June Month Total Collection from Customers May 34,500 105,800 499,100 June Quarter 103,500 $52,900 529,000 142,600 641,700 756,700 756,700 $952,200 $2,030,900 $439,300 $639,400 Budgeted Selling price per unit COGS at 80% per unit $23.00 $18.40 Direct Material Purchase Budget Budgeted production units Budgeted material Purchase April 25,400 467,360 May June Quarter 35,800 49,700 110,900 658,720914,480 2,040,560 c) Expected Cash disbursements for Materials Purchases May April 467,360 658,720 April Purchase May Purchase June Purchase Total purchase payment to Vendors June Quarter 467,360 658,720 914,480 914,480 $914,480 $2,040,560 $467,360 $658,720 Amount payable for purchase of inventory in May and June is $ 658,720 and $914,480 d) Expected Gross profit in July Sales Less: Cost of Goods Sold - 80% Gross profit $1,288,000 $1,030,400 $257,600