Question

Jed Berhad is a manufacturer of Product A and provides the following information for their budgeting purpose. You as an accountant is needed to prepare the budgets for top management review and planning: The opening bank balance was at unfavorable situation of RM 164,000. The company have the plan to produce the following number of unit corresponding with month and year Aug 33,200 Sept 37.400 2019 Oct 41.600 Nov 44,000 Dec 48,000 Jan Feb 52,000 51.200 2020 Apr 42.800 Mar 46.800 May 36,000 Jun 34.400 Raw material costing is RM 20 per unit. The payment method for this supplies are as follows: (1) 80% paid in the month of production () 20% is paid month after production Direct labour cost is RM 30 per unit payable in the month of production. Variable production cost is amounting to RM 10 per unit payable as following: 50 % in the month of production ii) 50% in the following production Fixed overhead expenses payable total of RM 80,000 per month. Machinery costing of RM 70,000 purchased and payable on February 2020. Since there will be more finished goods to be stored, Jed Bhd forced to incur additional rental cost for additional warehouse amounting RM 20,000 per month and payable in the following month. Additional capital contribution is expected in April 2020 is RM 32,000.

Answer 1

Statement showing 6 months Cash Budget ending 31 May 2020

Month	Dec-19	Jan-20	Feb-20	Mar-20	Apr-20	May-20
A. Production (in units)	48,000	51,200	52,000	46,800	42,800	36,000
B. Sales (in unit)	41,600	48,000	55,200	54,000	55,200	-
C. Sales (B*RM 120 per unit)	4,992,000	5,760,000	6,624,000	6,480,000	6,624,000	-
D. Cash received from sale to customers	4,800,000	6,240,000	4,992,000	5,760,000	6,624,000	6,480,000
E. Payment to suppliers of Raw Material	944,000	1,011,200	1,036,800	956,800	872,000	747,200
F. Payment made to Direct Labour	1,440,000	1,536,000	1,560,000	1,404,000	1,284,000	1,080,000
G. Payment made for Variable overhead	460,000	496,000	516,000	494,000	448,000	394,000
H. Payment made for Fixed overhead	80,000	80,000	80,000	80,000	80,000	80,000
I. Payment made for purchase of Machinery	-	-	70,000	-	-	-
J. Additional Payment made for rent of warehouse	-	-	-	20,000	20,000	20,000
K. Additional Capital contribution	-	-	-	-	32,000	-
L. Company Tax	-	-	-	-	-	35,000
M. Dividend Paid	25,000	-	-	15,000	-	-
N. Net cashflow (D-E-F-G-H-I-J-K-L-M)	1,851,000	3,116,800	1,729,200	2,790,200	3,888,000	4,123,800
O. Opening Cash Balance	3,700,000	5,551,000	8,667,800	10,397,000	13,187,200	17,075,200
P. Closing Cash Balance (N+O)	5,551,000	8,667,800	10,397,000	13,187,200	17,075,200	21,199,000

Working Note:

Jul-19 May-20 36,000 Jun-20 34,400 36,000 4,320,000 Aug-19 33,200 27,600 3,312,000 Month A. Production (in units) B. Sales (in unit) C. Sales (B*RM 120 per unit) D. Cash received from sale to customers E. Payment to suppliers of Raw Material F. Payment made to Direct Labour G. Payment made for Variable overhead H. Payment made for Fixed overhead 1. Payment made for purchase of Machinery J. Additional Payment made for rent of warehouse K. Additional Capital contribution L. Company Tax M. Dividend Paid N. Net cashflow (D-E-F-G-H-I-J-K-L-M) O. Opening Cash Balance P. Closing Cash Balance (N+O) Sep-19 37,400 44,000 5,280,000 4,320,000 731,200 1,122,000 353,000 80,000 Oct-19 41,600 40,000 4,800,000 3,312,000 815,200 1,248,000 395,000 Nov-19 44,000 52,000 6,240,000 5,280,000 870,400 1,320,000 428,000 80,000 Dec-19 48,000 41,600 4,992,000 4,800,000 944,000 1,440,000 460,000 80,000 Jan-20 51,200 48,000 5,760,000 6,240,000 1,011,200 1.536,000 496,000 80,000 Feb-20 52,000 55,200 6,624,000 4,992,000 1,036,800 1,560,000 516,000 80,000 70,000 Mar-20 46,800 54,000 6,480,000 5,760,000 956,800 1,404.000 494,000 80,000 Apr-20 42,800 55,200 6,624,000 6,624,000 872,000 1.284,000 448,000 80,000 531,200 996,000 166,000 80,000 6,480,000 747,200 1,080,000 394,000 80,000 6,624,000 694,400 1,032,000 352,000 80,000 80,000 80,000 - - 20,000 20,000 20,000 32,000 20,000 35,000 LI (80,000) 164,000 84,000 (1,773,200) 84,000 (1,689,200) 2,033,800 (1,689,200) 344,600 773,800 344,600 1,118,400 2,581,600 1,118,400 3,700,000 25,000 1,851,000 3,700,000 5,551,000 3,116,800 5,551,000 8,667,800 1,729,200 8,667,800 10,397,000 15,000 2,790,200 10,397,000 13,187,200 3,888,000 13,187,200 17,075,200 4,123,800 17,075,200 21,199,000 Tཁམ 4,445,600 21,199,000 25,644,600