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

Budgeting and budgetary control — practice question

Refer to Source A in the insert.
(a)[4]

Prepare the production budget (in units) for April, May, June and July 2025.

(b)[7]

Prepare an extract from the cash budget for June and July 2025 to show the production-related payments.

(c)[7]

Calculate the change in the expected bank overdraft at the end of June, July and August 2025 if the order were accepted. Assume that all the extra production would take place in the month in which the units are supplied.

(d)[7]

Advise the directors on whether or not the company should accept the order. Justify your answer.

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