Page 156 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Unit 8: Budgetary Control

2. Delay in the payment of wages and office expenses is only one month. It means wages and Notes

office expenses of Feb. month are paid in the next month, March.
Selling expenses from the above coloured boxes, it is obviously understood that during
the months of April, May and June; the following will be stream of payment of selling
expenses.
April = ` 2,000 of Mar. (Previous Month) and ` 2,200 of April (Current month) = ` 4,200
May = ` 2,200 of April (Previous Month) and ` 2,100 of May (Current month) = ` 4,300
June = ` 2,100 of May (Previous Month) and ` 1,900 of June (Current month) = ` 4,000

3. Selling expenses is having the delay of ½ month, which means 50% of the selling expenses
is paid only in the current month and the remaining 50% is paid in the next

Particulars Feb. Mar. April May June
Selling Expenses 3,600 4,000 4,400 4,200 3,800
Payment 50% in the current month 1,800 2,000 2,200 2,100 1,900
Delay 50% will be paid in the 1,800 2,000 2,200 2,100 1,900
subsequent month

Every month 50% of the selling expenses of the current month and 50% of the previous
month selling expenses are paid together; the above coloured boxes depict the payment of
50% of the current selling expenses along with 50% expenses of previous month.

Cash Budget for the Periods (April and June)
Particulars April May June
(`) (`) (`)
Opening Cash Balance 40,000 59,800 95,300
Cash Receipts
Sales 1,24,000 1,30,000 1,22,000
Total Receipts (A) 1,64,000 1,89,800 2,17,300
Payments
Plant Purchased ---------- ---------- 5,000
Tax payable 6,000 --------- --------
Purchases 80,000 76,000 78,000
Dividend payable --------- --------- 10,000
Wages 8,400 8,800 9,000
Offi ce expenses 5,600 5,400 5,600
Selling expenses 4,200 4,300 4,000
Total Payments (B) 1,04,200 94,500 1,11,600
Balance (A-B) 59,800 95,300 1,05,700
Self Assessment

Fill in the blanks:
6. The preparation of the production budget is mainly dependent on the ........................
budget.

7. The production volume is connected to the ........................ environment of the fi rm.
8. ........................ budget takes place only after identifying the number of fi nished products
expected to produce to the tune of production budget.

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