Reference no: EM131097256
Q: Brown and Jeffrey s, a West Midlands business, makes one standard product for use in the motor tr
Brown and Jeffrey s, a West Midlands business, makes one standard product for use in the motor trade. The product, known as the Fuel Miser, for which the business holds the patent, when fitted to the fuel system of production model cars has the effect of reducing petrol consumption. Part of the production is sold direct to a local car manufacturer, which fits the Fuel Miser as an optional extra to several of its models, and the rest of the production is sold through various retail outlets, garages, and so on. Brown and Jeffrey s assemble the Fuel Miser, but all three components are manufactured by local engineering businesses. The three components are codenamed A, B and C. One Fuel Miser consists of one of each component .The planned sales for the first seven months of the forthcoming accounting period, by channels of distribution and in terms of Fuel Miser units, are as follows:
Jan
|
Feb
|
Mar
|
Apr
|
May
|
June
|
July
|
Manufacturers
|
4,000
|
4,000
|
4,500
|
4,500
|
4,500
|
4,500
|
4,500
|
Retail, and so on
|
2,000
|
2,700
|
3,200
|
3,000
|
2,700
|
2,500
|
2,400
|
|
6,000
|
6,700
|
7,700
|
7,500
|
7,200
|
7,000
|
6,900
|
The following further information is available:
1 There will be inventories of finished units at 1 January of 7,000 Fuel Misers.
2 The inventories of raw materials at 1 January will be:
A 10,000 units
B 16,500 units
C 7,200 units
3 The selling price of Fuel Misers is to be £10 each to the motor manufacturer and £12 each to retail outlets.
4 The maximum production capacity of the business is 7,000 units a month. There is no possibility of increasing this output.
5 Assembly of each Fuel Miser will take 10 minutes of direct labour. Direct labour is paid at the rate of £7.20 an hour during the month of production.
6 The components are each expected to cost the following:
A £2.50
B £1.30
C £0.80
7 Indirect costs are to be paid at a regular rate of £32,000 each month.
8 The cash at the bank at 1 January will be £2,620.
The planned sales volumes must be met and the business intends to pursue the following policies for as many months as possible, consistent with meeting the sales targets:
- Finished inventories at the end of each month are to equal the following month's total sales to retail outlets, and half the total of the following month's sales to the motor manufacturer.
- Raw materials at the end of each month are to be sufficient to cover production requirements for the following month. The production for July will be 6,800 units.
- Suppliers of raw materials are to be paid during the month following purchase. The payment for January will be £21,250.
- Customers will pay in the month of sale, in the case of sales to the motor manufacturer, and the month after sale, in the case of retail sales. Retail sales during December were 2,000 units at £12 each.
Required: Prepare the following budgets in monthly columnar form, both in terms of money and units (where relevant), for the six months of January to June inclusive:
(a) Sales budget.*
(b) Finished inventories budget (valued at direct cost).†
(c) Raw materials inventories budget (one budget for each component).†
(d) Production budget (direct costs only).*
(e) Trade receivables budget.†
(f) Trade payables budget.†
(g) Cash budget.†
* The sales and production budgets should merely state each month's sales or production in units and in money terms. The other budgets should all seek to reconcile the opening balance of inventories, trade receivables, trade payables or cash with the closing balance through movements of the relevant factors over the month.
Welfare system provides in-kind benefits
: Welfare recipients would rather receive cash benefits than in-kind benefits, (medical care, housing assistance, food stamps), but much of the welfare system provides in-kind benefits. Is there a reason for not giving recipients their welfare benefits..
|
Should terry raise the price of haircuts above $15
: Suppose demand for Terry's haircuts increase to P=40 - 0.40Q. At a price of $15, should Terry raise the price of her haircuts? Why or why not?
|
What has been your real’ annual interest rate
: You invested $10,000 on January 1, 2014, at 7 percent interest compounded annually. You have not touched the investment since that date. You are planning to take your money and close out the investment on January 1,2024. If average in?ation is 3.7 pe..
|
Use in refuse-power edelectrical generating plant
: A currently owned shredder originally costing $800,000 was purchased 6 years ago for use in a refuse-power edelectrical generating plant. It was depreciated as MACRS-GDS 5-year property due to its status as analternative energy item. It has a present..
|
Raw materials inventories budget
: Brown and Jeffrey s, a West Midlands business, makes one standard product for use in the motor trade. The product, known as the Fuel Miser, for which the business holds the patent, when fitted to the fuel system of production model cars has the ef..
|
Identify the most accurate sentential counterpart
: Identify the most accurate sentential counterpart to the natural language proposition. "Either Redbook increases circulation or both Glamour hires models and Cosmo raises its price." R = "Redbook increases circulation"; G = "Glamour hires models";..
|
Develop a presentation that includes information from video
: Develop a presentation that includes information from the video on ways to address anxiety-reducing techniques and improve overall presentation delivery.
|
Currently experiencing high level of unemployment
: A paint firm has just announced that it will be building a new plant in a small town that is currently experiencing a high level of unemployment. The new plant will create 500 new jobs in the area and will occupy unused land at the edge of town.
|
Child labor might improve conditions for families
: Assume that labor demand is inelastic enough such that there are two equilibria. Explain how a complete and perfectly enforced ban on child labor might improve conditions for families according to this model.
|