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

Budgeting and budgetary control — practice question

Look at Source B in the insert.
(a)[7]

Prepare the production budget, in units, for each month from January through April.

(b)[2]

Explain the method for calculating the budgeted revenue for the four months from January to April.

(c)[7]

Advise the directors of the company whether they should, or should not, invest in a new, larger storage facility. Justify your answer.

(d)[7]

Prepare the trade payables budget for February and March. Show the balance of trade payables at both the start and the end of each month. Assume production remains as in your answer to part (a).

(e)[2]

Explain how this change would alter the budgeted statement of profit or loss.

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