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STUDENT
596 Points Joined October 2007

Hi , in ADVANCE MANAGEMENT ACCOUNTING (AMA) practice mannual , in chapter budgetory control on page 4.17, questions no 5 - Excel limited. How they have calculated purchases? ( Kindly see the payment portion of solution)

112000, 128000, 120000, 160000, 144000, 96000

 

Please please help

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On 17 February 2018 at 23:13 Report
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student
118 Points Joined August 2017
READ POINT NO. (d)

"d) Budgeted sales of each month are purchased and paid for in the preceding month;"

Means for sale in February excel limited have purchased in january and sales price is 25% above cost ie. 125% of cost as given in point no. (c)

hence for January Cash outflow for purchases is:
(1,40,000*100/125) = 112000

in this way we will get purchase of each month.
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On 18 February 2018 at 00:38
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student
118 Points Joined August 2017
that's why they have given sales of july so that we will calculate purchase price of june
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On 18 February 2018 at 00:42


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