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Question 2
0 / 3 points
Q16-2: A company’s annual sales budget is for 120,000 units, spread equally through the year. It needs to have one and three quarter’s month stock at the end of each month. If opening stock is 12,000 units, the number of units to be produced in the first month of the budget year is:
Question options:
12,000
13,000
10,500
15,500
Question 4
0 / 4 points
Q16-4: Receivable increase by £15,000 and payables increase by £11,000. The effect on cash flow of the Statement of Cash Flow is a (an):
Question options:
decrease of £4,000
increase of £4,000
increase of £26,000
decrease of £26,000
Question 5
0 / 4 points
Q16-5: Randy Airplanes Ltd is a privately owned business. It has budgeted for profits (after deducting depreciation of £41,000) of £150,000. Debtors are expected to increase by £20,000, inventory is planned to increase by £5,000 and creditors should increase by £8,000. Capital expenditure is planned of £50,000, income tax of £35,000 has to be paid and loan repayments are due totaling £25,000. What is the forecast cash position of Randy’s at the end of the budget year, assuming a current bank overdraft of £15,000?
Question options:
49,000
None of the above
66,000
52,000
18,000
Question 11
0 / 4 points
Q18-2: Trans PLC estimates that a new product will sell in sufficient quantities to justify its manufacture at a selling price of £175. The company needs to invest £5 million to produce a quantity of 10,000 of these new products per year and requires a return on that investment of 12% per annum. The current prediction is that the product will cost £140 to manufacture. To achieve the target selling price and target rate of return, the product needs to be re-engineered to reduce its cost of manufacture by:
Question options:
£35
£25
£60
£40
Question 12
2 / 10 points
Q18-3: SkinTan’s top five customers generate sales revenue of £950,000 per annum. Each generates a different gross margin as a consequence of price negotiations that have been carried out over several years. Because of their location, each customer incurs different distribution expenses. Sales commissions are paid at the rate of 6% on all sales. Fixed costs are customer specific, covering salaries of sales and office staff who service each customer. The following table shows the information for each of the top customers for the previous year.
Sales
250,000
250,000
200,000
150,000
100,000
Gross margin %
30%
25%
21%
37%
39%
Distribution expenses
30,000
14,000
25,000
12,000
6,000
Fixed costs
30,000
25,000
16,000
15,000
10,000
Carry out a customer profitability analysis in relation to SkinTan’s top customers. Then match the customer with the profitability.
__3__
Customer A
__1__
Customer D
__2__
Customer C
__5__
Customer E
__4__
Customer B
1.
0
2.
8,500
3.
-11,000
4.
19,500
5.
17,000
