Use the information provided below to prepare the Cash Budget for October, November, and December 2021. Provide separate monetary columns for each month. INFORMATION 1. The following data and estimates are available for a project of Fego Limited for September to December 2021: September October November December R R R R Sales 130 000 110 000 120 000 140 000 Wages 40 000 34 000 38 000 39 000 Fixed overheads 16 000 16 000 16 000 16 000 Variable overheads 16 000 13 000 15 000 17 000 Materials purchases 17 000 14 000 16 000 18 000 2. Sixty percent (60%) of the sales are expected to be for cash and the balance on credit. Credit customers usually pay in the month after the sale. 3. Labour costs are paid for in the month in which they are incurred. 4. Fixed overheads include R5 000 each month for depreciation and payment is made monthly. 5. Variable overheads are paid for in the month after they are incurred. 6. Direct materials are purchased by electronic funds transfers each month. 7. The cash balance on 01 October 2021 is expected to be R30 000. 8. Ten percent (10%) of the sales for December 2021 will be invested in an interest-bearing account for a period of six months. Interest will be received upon maturity.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Use the information provided below to prepare the
2021. Provide separate monetary columns for each month.
INFORMATION
1. The following data and estimates are available for a project of Fego Limited for September to
December 2021:
September October November December
R R R R
Sales 130 000 110 000 120 000 140 000
Wages 40 000 34 000 38 000 39 000
Fixed
Variable overheads 16 000 13 000 15 000 17 000
Materials purchases 17 000 14 000 16 000 18 000
2. Sixty percent (60%) of the sales are expected to be for cash and the balance on credit. Credit
customers usually pay in the month after the sale.
3. Labour costs are paid for in the month in which they are incurred.
4. Fixed overheads include R5 000 each month for depreciation and payment is made monthly.
5. Variable overheads are paid for in the month after they are incurred.
6. Direct materials are purchased by electronic funds transfers each month.
7. The cash balance on 01 October 2021 is expected to be R30 000.
8. Ten percent (10%) of the sales for December 2021 will be invested in an interest-bearing account for a
period of six months. Interest will be received upon maturity.
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