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

Budgeting and budgetary control — practice question

Use 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 January to April.

(c)[7]

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

(d)[7]

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

(e)[2]

Explain the effect of this change on the budgeted statement of profit or loss.

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