ACCA · Question 36 · Budgeting

SECTION B - MULTI-TASK QUESTION 1 (BUDGETING)

A renewable energy startup is preparing its budgets for Q3.
Data:

• Budgeted sales: July 1,000 units, August 1,200 units, September 1,500 units.
• Selling price: $200 per unit.
• Sales are 20% cash and 80% credit (paid 1 month after sale).
• June credit sales were $150,000.
• Variable production cost: $100 per unit.
• Fixed production overheads: $50,000 per month.

Provide the following 5 answers (each worth 2 marks):

1. Calculate total sales revenue budgeted for August.
2. Calculate cash receipts from credit customers in July.
3. Calculate total cash receipts in August.
4. If actual production in August is 1,300 units, calculate the flexed variable production cost allowance.
5. Calculate the total flexed budget allowance (variable + fixed) for August based on 1,300 units.