Question

Marks for Parts 1(a) and 2(a) will be based on accuracy, correct approach and a concise, tidy and easy to follow presentation of the figures. Marks for Parts 1(b) and 2(b) will be based on practical and applied answers that demonstrate understanding of the relevant unit content (referring to relevant concepts) and are appropriate for the given scenario. References should be kept to an absolute minimum in this applied context. References to journal papers, in particular, are unnecessary and will detract from your answer. A separate marking rubric will be provided for Part 3 of the assignment. The Overall Scenario You work for a management consulting firm and have 3 client jobs to complete: 1. Prepare a cash budget for XYZ Pty Ltd and provide associated advice on required financing; 2. Prepare and interpret a variance analysis for ABC Pty Ltd; and 3. Advise LMN Pty Ltd on sources of finance. Job Details 1. XYZ Pty Ltd operates in a seasonal industry with a sales peak in spring. Budgeted sales, along with budgeted raw materials and labour costs are shown in the table below. Extract from budgeted income statement Month May June July Aug Sep Oct Νον Dec Sales $150,000 $160,000 $210,000 $300,000 $400,000 $500,000 $340,000 $200,000 Labour and materials $105,000 $112,000 $147,000 $210,000 $280,000 $350,000 $238,000 $140,000

Both photos are part of the same question.

Answer 1

$167500 $215 500 $291300 $395000 $443000 $352000 Cash budget from Tuey to December of xyl Company July August september October November December cash balance $100CD (11550D) CF498800) ($92300) 0459300) 051100) sales Rerence $167500 $215500 $297500 $395000 0443000 $35201 $300 OD $30DOD $ 30000 30000 30000 3000D $ LODOD LOD OD $100 od $LODOD $100 OD $LODOD $LODODD $2150DD $12SODO Particulars () Receipti Total Cecelps $111500 200000 4252100 $302100 $283100 $292900 Payounts: Labour material $133000 $184.200 $25,000 $322000 $282800 $179200 seling generale administration Rent Depreciatim $20000 20000 20000 $20000 $20000 $20000 Tar payment $33000 $330DD Motor vehicles 480 klorking Note: computatito of sales Revenue May June.. July Aug sept october Nov. 430000 $62500 $37500 $32000 *&&000 $40000 $42000 $115500 $52500 $60000 $165000 $75000 $ 80000 $220000 $10DODO Total payment $193000 $244600 $345000 $462000 $342800 $272200 Net cash balance ($(5500) C$44600)($92300) ($159300)(459100) $20700 available December $68000 $187000 $ 4000D 1/1 a =

July August September October November Decembe computation of labour material expense: Amount ($) June $112.000 $612.00 $44800 $141000 $ 88200 $58800 $210DOD $126000 $84000 $28 ODUD $168000 $112000 $350000 $210000 $140.00 $238000 $140000 $142800 $95200 $8400C $67200 $133000 $164800 $252000 $323.000 $282800 $179207 . (b) Immediate Nays to fund unexpected cash shortages include: Collecting outstanding debts • Increasing prices Refinancing or or arranging for overdraft Negotiating better payment terms with suppliers Negotiating better payment terms with automers Identifying non-core business assets that can be sold for cash uring factoring or invoice discounting services By monitoring and forecasting cast inflows and out flows, we can predict cash flow shortfaus and organise debt finance if necessary with adequate working capital, we will have more time to manage other aspects of rapidly expanding business. 2/2