Page 325 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 325
Budgeting
Test your understanding 5
(a)
July $0
August $21,200
September $14,000
July August September
Opening inventory 0 ($10,000) ($10,000)
Purchases 40 × $280 = 50 × $280 = 50 × $250 =
$11,200 $14,000 $14,000
Closing inventory $10,000 $10,000 $10,000
Total purchases $21,200 $14,000 $14,000
Cash payments each month are for the previous month’s purchases.
Therefore, no payments are made in July
(b) $13,600
$
August labour cost 50 × $160 8,000
July variable overhead cos 40 × $40 1,600
Fixed overhead cash cost ($5,000 - $1,000 depreciation) 4,000
$13,600
317
