Financial Budgeting and Analysis

Name Date
Task 1
Level: 3 Unit code: CBB365
Unit Title: Financial Budgeting and Analysis
1- Apple Ltd produces one type of machine: the SS33. The expected sales for machine
for 6 month ending 30 June 2015 are: AC1.1
January February March April May June
Budget sales 60 30 40 110 130 60
Expected selling price per machine 45 45 45 45 45 45
-Prepare the sales budget for the three months ending 30 June 2015
Particulars April May June
Budgeted
sales unit (A)
110 130 60
Expected
selling price
(B)
45 45 45
Sales
revenue (A)*
(B)
4950 5850 2700
2- The Apple Ltd also needs a production budget for the above period.
Prepare a production budget considering the following additional
information: AC1.1
-Use the budget sales figures given in the previous question.
-The stock level must not fall below 100, which is the level at the end of May
-An even production, flow of 70 units is required.
-opening stock 120 and closing stock 110
1

Use the table to answer your question
Jan Feb Mar Apr May Jun
Opening
stock
120 130 170 200 160 100
Add
production
70 70 70 70 70 170 (b/f)
Less sales 60 30 40 110 130 160
Closing
stock
130 170 200 160 100 110
3- Analyse problems when preparing a budget: AC1.2
 Basically, budgets are prepared which is based on the assumptions that’s why it reflects
inaccurate data which might result into wrong decision.
 It is very time-consuming task to create monthly budgets and each department and unit’s
manager blame each other in case of any unfavourable outcome.
4. The following information relates to the production and sales of 5000 units
of video. AC2.1, 2.2, 2.3
£
Total direct labour costs 3.00 per unit
Total direct material costs 5.50 per unit
Total fixed costs 4.35 per unit
Total sales revenue 15.00 per unit
a) Prepare a break-even graph
Data
chart
Units
Fixed
cost
Variable
cost
Total
cost Revenue
3000 21750 25500 47250 45000
4000 21750 34000 55750 60000
5000 21750 42500 64250 75000
6000 21750 51000 72750 90000
7000 21750 59500 81250 105000
2

b) Indicate the break-even point
c) Prove your answer by calculation
Sales unit 5000
Selling price 15
direct labour cost 3
direct material cost 5.5
fixed cost 4.35
Contribution per unit 6.5
Sales revenue 75000
Less variable cost:
direct labour 15000
direct material 27500 42500
contribution 32500
Less fixed cost 21750
Net profit 10750
Contribution margin 43%
Break-even point 50192.31
3
BEP