Accounting 9706 · AS & A Level · Budgeting and budgetary control

Budgeting and budgetary control — practice question

Section B: Cost and Management Accounting. Consult Source B1 in the insert.
(a)[2]

State two advantages of preparing a cash budget.

(b)[4]

Prepare a production budget (in units) for July and August.

(c)[11]

Prepare a cash budget for July and August.

(d)[4]

Calculate the minimum amount of credit sales that must be offered the cash discount to reach an ending bank balance of $24\,500$.

(e)[4]

Explain two other methods that could improve the cash position at the end of August.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Arrange credit when cash is short

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