Home Uncategorized Accounting and Finance

Uncategorized

Accounting and Finance

Business plan and completing excel worksheet

>Contribution Statement

.00

£ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00

-£ 5.

-£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40 -£ 5.40

-£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60 -£ 0.60

.75

-£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75 -£ 1.75

-£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15 -£ 0.15

-£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90 -£ 7.90

£ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10 £ 12.10

221

,072.84

-£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5 -£ 13,019.5

8,838.84

CONTRIBUTION STATEMENT
								JANUARY											FEBRUARY									MARCH						APRIL			MAY			JUNE	JULY	AUGUST	SEPTEMBER	OCTOBER	NOVEMBER	DECEMBER	TOTAL:
	Selling price:																								£ 2						0
Less variable costs p.u.:
Direct Material (Cotton):																																																–	5	4	40
Direct Material (Thread):													-£ 0.60
	Direct Labour													-£	1
Transfer paper:													-£											0.					15
Total Variable cost per unit:													-£ 7.90
Contribution per unit:													£ 12.10
Sales per event:						2000						2200						2420			26		62			2928	3			33		35	51		3729	3915		4111	4316	38436
Total Contribution:			£ 24,200.00			£ 26,620.00			£ 29,282.00			£ 32,210.20	£ 35,431.22	£ 38,974.34	£ 40,923.06	£ 42,969.21	£ 45,117.67	£ 47,373.	56	£ 49,742.23	£ 52,22	9.3	£ 4	65
Total fixed cost:												-£ 13,019.5
–	£ 156,234.00
PROFIT:	£ 11,180.50	£ 13,600.50	£ 16,262.50	£ 19,190.70	£ 22,411.72	£ 25,954.84	£ 27,903.56	£ 29,949.71	£ 32,09	8.1	£ 34,354.06	£ 36,722.73	£ 39,20	9.8	£		30
C/S ratio:	(CPU/ Sales Price)*	100	(12.10/20)*100= 60.5%

Capital Expenditure Budget

January

£ 1,600.00

January

£ 320.00

January

CAPITAL EXPENDITURE BUDGET
Description of capital investment items	Month:	Net book value:			Depreciation	Amount:
5 T- shirt heating press machine					January		£ 1,280.00		£ 320.00	£ 1,600.00
T-shirt manufacturing machine		£ 6,400.00									£ 8,000.00
		Furniture		£ 256.00		£ 64.00
6	Computer		£ 2,400.00		£ 600.00							£ 3,000.00
Total capital expenditure:		£ 10,336.00				£ 2,584.00		£ 12,920.00

Sales Budget

SALES

BUDGET

JANUARY FEBRUARY

MARCH APRIL MAY JUNE JULY

AUGUST

SEPTEMBER OCTOBER NOVEMBER

DECEMBER

TOTAL:
Sales Units:

2000 2200 2420

2662

2928

3221 3382 3551

3729 3915 4111 4316 38436
Selling price: £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00 £ 20.00
Total Revenue: £ 40,000.0 £

,000.0 £

,400.0 £

,240.0 £ 58,564.0 £ 64,420.4 £ 67,641.4 £ 71,023.5 £ 74,574.7 £ 78,303.4 £ 82,218.6 £ 86,329.5 £ 768,715.4

SALES

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER 2000 2200 2420 2662 2928.

20000

00000003 3221.0200000000004 3382.0710000000008 3551.1745

500

000011 3728.7332775000013 3915.

169

9413750016 4

110

.9284384437515 4316.47486036

391

Schedule Of Cash Collection

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:
JANUARY 20000 20000 – – – – – – – – – –

FEBRUARY –

22000 – – – – – – – – –

MARCH – –

24200 – – – – – – – –

APRIL – – –

26620 – – – – – – –

MAY – – – –

29282 – – – – – –

JUNE – – – – –

32210.2 – – – – –

JULY – – – – – –

33820.7 – – – –

AUGUST – – – – – – –

35511.7 – – –

SEPTEMBER – – – – – – – –

37287.3 – –

OCTOBER – – – – – – – – –

39151.7 –

NOVEMBER – – – – – – – – – –

41109.3

DECEMBER – – – – – – – – – – –

43164.7

20000

SCHEDULE OF CASH COLLECTION
40000
	22000	44000
	24200	48400
	26620	53240
	29282	58564
	3	2210	64420.4
	33820.7	67641.4
	35511.7	71023.4
	3728	7.3	74574.6
	39151.7	78303.4
	41109.3	82218.6
	43164.7
		SUB-TOTAL:	42000	46200	50820	55902	61492.2	6603	0.9	69332.4	72799	76439	80261	84274	725	550

Production Budget

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:

2000 2200 2420 2662 2928 3221 3382 3551 3729 3915 4111 4316 38436

100 110

169

2210

PRODUCTION BUDGET
Sales unit
All closing stock	121	133	146	161	178	186	196	206	216	1922
		Less opening stock	-100	-110	-121	-133	-146	-161	-169	-178	-186	-196	-206	-1706
Production units	2100	2431	2674.1	2941.6	3236.1	3390.2	3	559.7	3737.2	3924.9	4120.5	4326.3	38651.6

Purchases And Inventory Budget

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:

2000 2200 2420 2662 2928 3221 3382 3551 3729 3915 4111 4316

0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9

30 33

40 44 48 51 53 56 59 62 65

Less opening stock 0 30 33 36.3 40 44 48 51 53 56 59 62

12.3

£ 6.00 £ 6.00 £ 6.00 £ 6.00 £ 6.00 £ 6.00 £ 6.00 £ 6.00 £ 6.00 £ 6.00 £ 6.00

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:
Production Units 2000 2200 2420 2662 2928 3221 3382 3551 3729 3915 4111 4316

0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15

Add closing stock 5

7.3 8.1 8.5 8.9 9.3 9.8

Less opening stock 0 -5

559.7

Cost per Kg.

£ 4.00 £ 4.00 £ 4.00 £ 4.00 £ 4.00 £ 4.00 £ 4.00 £ 4.00 £ 4.00 £ 4.00 £ 4.00

Total Cost

PURCHASES AND INVENTORY BUDGETS
		Production Units
Kg. of cotton p.u.
Tot. Kg. of cotton	1800.0	1980.0	2178.0	2395.8	2635.4	289	8.9	3043.9	3196.1	3355.9	3523.7	3699.8	3884.8	34592.19
	Add closing stock		36.3	576.54
	-5
	Sub-Total	1,830.0	1,983.0	2,181.3	2,399.4	2,639.3	2,903.2	3,046.6	3,198.3	3,358.8	3,526.4	3,702.5	3,887.6	34,656.43
	Cost per Kg.												£ 6.00
	Total Cost		£ 10,980.0		£ 11,898.0		£ 13,087.8	£ 14,396.6		£ 15,835.8		£ 17,419.4		£ 18,279.6	£ 19,189.9	£ 20,152.7	£ 21,158.3	£ 22,215.0	£ 23,325.4	£ 207,93	8.5
Kg. of thread p.u.
Tot. Kg. of thread	300.0	330.0	363.0	399.3	439.2	483.2	507.3	532.7	559.3	587.3	616.6	647	5765.37
5.5	6.05	6.7	10.3	10.8	96.09
-5.5	-6.05	-6.7	-7.3	-8.1	-8.5	-8.9	-9.3	-9.8	-10.3	85.45
Sub-total	305.0	330.5	363.6	399.9	439.9	483.9	507.7	533.1	587.8	617.1	648.0	5776
											£ 4.00
£ 1,220.00	£ 1,322.00	£ 1,454.20	£ 1,599.62	£ 1,759.40	£ 1,935.62	£ 2,030.66	£ 2,132.22	£ 2,238.93	£ 2,351.05	£ 2,468.47	£ 2,591.85	£ 23,104.02

Schedule of suppliers payment

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:

JANUARY

– – – – – – – – – – £ 10,980.0

FEBRUARY –

– – – – – – – – – £ 11,898.0

MARCH – –

– – – – – – – – £ 13,087.8

APRIL – – –

– – – – – – –

MAY – – – –

– – – – – – £ 15,835.8

JUNE – – – – –

– – – – – £ 17,419.4

JULY – – – – – –

– – – – £ 18,279.6

AUGUST – – – – – – –

– – –

SEPTEMBER – – – – – – – –

– – £ 20,152.7

OCTOBER – – – – – – – – –

–

NOVEMBER – – – – – – – – – –

£ 22,215.0

DECEMBER – – – – – – – – – – –

£ 13,995.2

SUB-TOTAL: £ 6,588.0

SCHEDULE OF SUPPLIERS PAYMENT

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:

JANUARY

– – – – – – – – – –

FEBRUARY –

– – – – – – – – –

MARCH – –

– – – – – – – –

APRIL – – –

– – – – – – –

MAY – – – –

– – – – – –

JUNE – – – – –

– – – – –

JULY – – – – – –

– – – –

AUGUST – – – – – – –

– – –

SEPTEMBER – – – – – – – –

– –

OCTOBER – – – – – – – – –

–

NOVEMBER – – – – – – – – – –

DECEMBER – – – – – – – – – – –

SUB-TOTAL: £ 732.0

	SCHEDULE OF SUPPLIERS PAYMENT
Cotton
	£ 6,588.0	£ 4,392.0
£ 7,138.8	£ 4,759.2
£ 7,852.7	£ 5,235.1
£ 8,637.9	£ 5,758.6	£ 14,396.5
£ 9,501.5	£ 6,334.3
£ 10,451.6	£ 6,967.8
£ 10,967.8	£ 7,311.8
£ 11,513.9	£ 7,675.9	£ 19,189.8
£ 12,091.6	£ 8,061.1
£ 12,694.9	£ 8,463.3	£ 21,158.2
£ 13,329.0	£ 8,886.0
	£ 13,995.2
£ 11,530.8	£ 12,611.9	£ 13,873.0	£ 15,260.1	£ 16,785.9	£ 17,935.6	£ 18,825.7	£ 19,767.5	£ 20,756.0	£ 21,792.3	£ 22,881.2	£ 198,608.0
Thread
	£ 732.0	£ 488.0	1220.0
£ 793.2	£ 528.8	1322.0
£ 872.5	£ 581.7	1454.2
£ 959.8	£ 639.8	1599.6
£ 1,055.6	£ 703.8	1759.4
£ 1,161.4	£ 774.2	1935.6
£ 1,218.4	£ 812.3	2030.7
£ 1,279.3	£ 852.9	2132.2
£ 1,343.4	£ 895.6	2238.9
£ 1,410.6	£ 940.4	2351.1
£ 1,481.1	£ 987.4	2468.5
£ 1,555.1	1555.1
£ 1,281.2	£ 1,401.3	£ 1,541.5	£ 1,695.5	£ 1,865.1	£ 1,992.6	£ 2,091.6	£ 2,196.2	£ 2,306.2	£ 2,421.5	£ 2,542.5	22067.3

Direct Labour Budget

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:

Production Units 2000 2200 2420 2662 2928 3221 3382 3551 3729 3915 4111 4316 38436

15 15 15 15 15 15 15 15 15 15 15 15

500 550

£ 7.0 £ 7.0 £ 7.0 £ 7.0 £ 7.0 £ 7.0 £ 7.0 £ 7.0 £ 7.0 £ 7.0 £ 7.0

DIRECT LABOUR BUDGET
Minutes p.t-shirt
Tot.hours	605	665.5	732.1	805.3	845.5	887.8	932.2	978.8	1027.7	1079.1	9608.9
Cost p.hour												£ 7.0
TOT.COST		£ 3,500.0		£ 3,850.0		£ 4,235.0		£ 4,658.5		£ 5,124.4		£ 5,636.8	£ 5,918.6	£ 6,214.6	£ 6,525.3	£ 6,851.5	£ 7,194.1	£ 7,553.8	£ 67,262.6

Direct labour

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER 500 550 605 665.5 732.05000000000007 805.255 845.51775000000021 887.79363750000027 932.18331937500034 978.7924853437504 1027.7321096109379 1079.1187150914848

Overheads Budget

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL:

£ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00

Factory:

£ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00

£ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00

£ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 2,400.00

£ – 0 £ – 0 £ – 0 £ – 0 £ 250.00 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ 500.00

£ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00

Depreciation: £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ 2,584.00 £ 2,584.00

£ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50

Sub-Total

£ 12,762.50 £ 12,762.50 £ 12,762.50 £ 12,762.50 £ 13,012.50 £ 12,762.50 £ 12,762.50 £ 12,762.50 £ 12,762.50

£ 156,234.00

OVERHEADS BUDGET
		Advertising						£ 500.00	£ 6,000.00
	Rent	£ 36,000.00
		Utilities					£ 1,000.00	£ 12,000.00
	Office expenses					£ 200.00
		Trainer	£ 250.00							£ – 0
	Fixed Wages	£ 96,000.00
		Bank Interests					£ 62.50	£ 750.00
	£ 13,012.50			£ 12,762.50	£ 15,346.50

Cash Budget

January

£ – 0

£ 24,200.00 £ 26,620.00 £ 29,282.00 £ 32,210.20

£ – 0 £ 20,000.00 £ 22,000.00 £ 24,200.00 £ 26,620.00 £ 29,282.00 £ 32,210.20 £ 33,820.71 £ 35,511.75 £ 37,287.33 £ 39,151.70 £ 41,109.28

0 0 0 0 0 0 0 0 0 0 0

£ 1,600.00 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0

£ 8,000.00 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0

Furniture £ 320.00 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0
Computer £ 3,000.00 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0
Direct Labour £ 3,500.0 £ 3,850.0 £ 4,235.0 £ 4,658.5 £ 5,124.4 £ 5,636.8 £ 5,918.6 £ 6,214.6 £ 6,525.3 £ 6,851.5 £ 7,194.1 £ 7,553.8

£ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00 £ 8,000.00

Trainer: £ 250.00 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0 £ 250.00 £ – 0 £ – 0 £ – 0 £ – 0 £ – 0
Rent £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00 £ 3,000.00

£ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00 £ 1,250.00

Bank Interests £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50 £ 62.50
Utilities £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00 £ 1,000.00
Advertising £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00 £ 500.00

£ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00 £ 200.00

-£ 3,302.5 £ 7,693.0 £ 21,269.3 £ 37,604.5 £ 56,974.8 £ 79,683.4 £ 105,097.8 £ 132,753.1 £ 162,491.2 £ 194,416.7

February	March	April	May	June	July	August	September	October	November	December
OPENING BALANCE		-£ 3,302.5		£ 7,693.0		£ 21,269.3		£ 37,604.5		£ 56,974.8		£ 79,683.4	£ 105,097.8	£ 132,753.1	£ 162,491.2	£ 194,416.7	£ 228,640.57
INFLOWS
Sales receipt1		£ 20,000.00		£ 22,000.00		£ 33,820.71		£ 35,511.75		£ 37,287.33		£ 39,151.70	£ 41,109.28	£ 43,164.7
Sales receipt2
Bank loan	£ 15,000.00
TOTAL INFLOWS	£ 35,000.00	£ 42,000.00	£ 46,200.00	£ 50,820.00	£ 55,902.00	£ 61,492.20	£ 66,030.91	£ 69,332.46	£ 72,799.08	£ 76,439.03	£ 80,260.98	£ 84,274.03
OUTFLOWS
T-shirt heating press machine
	T-shirt making machine
Direct material (cotton)	£ 6,588.00	£ 11,530.80	£ 12,611.88	£ 13,873.07	£ 15,260.12	£ 16,785.97	£ 17,935.50	£ 18,825.80	£ 19,767.63	£ 20,756.07	£ 21,792.31	£ 22,881.27
Direct material (thread)	£ 732.00	£ 1,281.20	£ 1,401.32	£ 1,541.45	£ 1,695.49	£ 1,865.13	£ 1,992.65	£ 2,091.60	£ 2,196.24	£ 2,306.20	£ 2,421.50	£ 2,542.50
Paper sheet	£ 300.00	£ 330.00	£ 363.00	£ 399.30	£ 439.23	£ 483.15	£ 507.31	£ 532.68	£ 559.31	£ 587.28	£ 616.64	£ 647.47
Fixed wages
Loan repayment												£ 1,250.00
Office Expenses
TOTAL OUTFLOWS	£ 38,302.50	£ 31,004.50	£ 32,623.70	£ 34,484.82	£ 36,531.69	£ 38,783.54	£ 40,616.58	£ 41,677.12	£ 43,060.96	£ 44,513.59	£ 46,037.08	£ 47,637.57
CLOSING BALANCE	£ 228,640.6		£ 265,277.0

Income Statement

£ 768,715.4

£ – 0

£ 67,262.6

Advertising

Utilities

Office expenses

Trainer

Fixed Wages

Depreciation

Bank Interests

Income Stamement
SALES:
Cost of Sales:
Opening Stock
Raw Material Purchases	£ 236,808.0
Less Closing Raw material	-£ 433.2
Add Labour cost
Total production Cost	£ 303,637.4
Less closing finished production
-£ 1,706.4
-£ 301,931.0
GROSS PROFIT:	£ 466,784.4
Less Overheads:
-£ 6,000.00
Rent Factory	-£ 36,000.00
-£ 12,000.00
-£ 2,400.00
-£ 500.00
-£ 96,000.00
-£ 2,584.00
-£ 750.00
-£ 156,234.00
Operating Profit = Net Profit before taxation
£ 310,550.4
Less Corporate tax (20%)		-£ 62,110.1
Profit for the year after taxation= Retained profit for the year
		£ 248,440.3

Balance Sheet

£ 1,600.00 £ 320.00 £ 1,280.00

T-shirt making machine £ 8,000.00 £ 1,600.00 £ 6,400.00
Furniture £ 320.00 £ 64.00 £ 256.00

£ 3,000.00 £ 600.00

£ 12,920.00 £ 2,584.00 £ 10,336.00

£ 265,277.0

£ 43,164.7

-£ 62,110.1

£ – 0

£ 248,440.3

COSTS	DEP’N TO DATE	NET
Non-current assets:
T-Shirt heating press machine
Computers	£ 2,300.00
Current assets:
Stock (Closing inventory)	£ 2,139.6
Bank/cash
Debtors
£ 310,581.4
Less current liabilities:
Corporate Taxation
Creditors	-£ 10,366.9
-£ 72,477.0
Working capital:	£ 238,104.4
Net Assets:	£ 248,440.4
Equity :
Capital:
Retained profit:
Total:

ACC4A8 14 STEPS to your GROUP BUDGETING COURSEWORK

– GUIDANCE

Devise a Master Budget where Sales is the principal budget factor. Assign the work equally between your team members & record who is responsible for each budget.

1.
Product Description:

· What is it? How does/will it work?

· Who will be in your Target market?

· How will this Market be reached (i.e. resource & cost implications)?

2.
Financing:

· What level of Finance is needed?

· How/from whom will this be obtained?

· What will be the cost of any additional financing required?

3. Table of Assumptions

· Any and all Assumptions need to be clearly stated within your table!

4.
Contribution Statement:

· Set a realistic Selling price based on your research (this is vital!)

· Estimate & itemise all Variable Costs/unit based on those needed

· Calculate your % mark up on cost or on sales (Assumptions)

· Calculate Contribution per unit, Total contribution & C/S ratio

5.
Capital Expenditure Budget:

· Itemise all items of Non-Current Assets needed to run your business

· How much will these cost? Useful lives? Depreciation method/rates?

· Who will supply these items and on what terms (cash/credit/lease)?

6.
monthly Sales Budget:

· Forecast Sales demand dictates Inventory, Purchases and Overheads

·
Quantity of Sales (units) x Selling Price – Monthly basis with Total p.a.

· Allow for current Competitive & Economic conditions! (Research)

· Interlink with Advertising & Promotional plan & Overhead budget

7.
monthly Production Budget:

· Budgeted in Units based on Production & Inventory level

Production = Sales + Closing Inventory – Opening Inventory

8.
monthly Purchases Budget

· Quantity needed to purchase to meet production in Units x Cost/unit

9. monthly Labour Budget:

· What skilled & unskilled labour will be needed to produce your product? (Assumptions)

·
Monthly Labour Hours x Rate per Hour = Direct Labour Cost

10. monthly Overheads Budget:

·
Itemise all likely overheads categorised separately

· Overheads are ubiquitous! n.b. interest cost step 2. advertising/promotion step 6.

· Separate Semi-variable costs (these mixed costs include sales commissions, delivery charges, all utilities, etc.)

· Consider the timing of payment of overhead expenses (Assumptions)

11. Break-Even & Margin of Safety (MoS) calculations for the year:

· Break-Even point in Units & £ Sales value

· M. o S. in Units & as a % (Is it Realistic?)

12. Cash Budget on a monthly basis, plus Total for the Year:

· starts with Opening Balance (from own finances)

· Receipts: use Sales Budget adjusted according to credit terms offered to customers, include bank finance (borrowings)

· Payments: use Purchases Budget + credit taken from suppliers + Overheads Budget + Direct Labour Budget

·
Opening Balance + Receipts – Payments = Closing Balance (Monthly)

· Consider any need for an Overdraft (incl. overdraft interest)

13.
Budgeted Income Statement (Trading, Profit & Loss Account) for the Year:

· Use the correct & detailed format to summarise your relevant figures

14.
Budgeted Balance Sheet for the Year:

· Use the correct headings & format

· Non-Current Assets: show Cost – Depreciation = N.B.V. per asset class

· Inventory: use Closing Inventory

· Trade Receivables (Debtors) = Sales – Receipts

· Bank = Closing Balance from Cash Budget

· Trade Payables (Creditors) = Purchases + Overheads – Supplier Payments

· Overdraft or loan needs to be included to complete project financing

· Equity (Capital & Reserves) = Amount Invested + Profit/(loss) for Year

· Balance Sheet needs to balance as the final ‘proof of your pudding’!

ACC4A8 BUDGETING COURSEWORK – FURTHER GUIDANCE

· Select your business entity that will produce a product that uses two types of materials and labour (Research this and include in Business Plan element).

All FIVE group members must be assigned a specified portion of work on budget preparation in which they are involved and they are accountable for

· Prepare a detailed Contribution Statement – make realistic assumptions about Pricing & Variable Costs and itemise them (Research for Plan)

· Specify your Capital Expenditure (Fixed Assets) needs, their cost, source (from where they will be bought), their useful lives, depreciation. (Capex)

· Consider your projected Sales volume & growth rate (e.g. any seasonality) for the whole year (Table of Assumptions)

· Plan Payment terms for customer receipts & to your suppliers purchases (Assumptions)

· Decide on the Opening & Closing Inventory required to maintain your sales volume (Assumptions)

· Calculate & display details of the Break-Even Point & Margin of Safety, etc (Spreadsheet)

· Prepare a Production Budget and a Purchases Budget, allowing for your Inventory requirements (Spreadsheets)

· Consider ALL of the likely Overhead costs & itemise them (Spreadsheet)

· Prepare a monthly & annual totalled Cash Budget incorporating all of the above relevant items (Spreadsheet)

· Prepare an Income Statement for the year (Spreadsheet)

· Prepare a Balance Sheet as at the year end, reconciling the closing cash balance, the opening & closing inventory, closing debtors/creditors and your projected profit or loss (Spreadsheet)

· BE REALISTIC and TRANSPARENT throughout

· BE PREPARED to SUBSTANTIATE ANY/ALL FIGURES

· TEAMWORK – QUESTIONS MAY ARISE FOR ANY PARTICIPANT

B.E.R.C T-shirt

The inspiration for a company for T-shirt came through the idea of Glyn Williams who is a British man that made a net profit of 800.000 $ of selling T-shirt and therefore we also decided to make T-shirts and look if it is achievable to make as much money as Mr. Williams with the help of accounting.

Since our inspiration comes from Mr Williams we have decided to imitate his printing style as well as the T-shirt quality he uses. But our printing should be different from Mr. Williams. Since our printing are more made in a funny sense.

We will start our business in London from the first of January 20

7 and will run our business for a year which means until the 31th of December and then make a judgment whether it is worth to run the business or even to expand the business. In order to make a better judgment we will use management accounting skills which will be mainly budgeting to make better planning and decision. Our business is a partnership and we have decided not to be a public limited company if the business is making good profit then we will decide our company to go IPO.

Since we are almost at the end of 2016 we decided to purchase certain assets and install them in our place so our business can start next year. Our following purchases will be 5 T-shirt heating press machine since we will make appealing designs on the T-shirt and the price for each is 320£. The second asset will be a T-shirt manufacturing machine since we have raw materials and we have to make them in a finished product and its price is 8000£. Our third asset will be furniture (320£) since it is needed for a basic business to work as well as some computers (3000£). We have calculated that our depreciation for our Capital expenditure will be 20% for 5 years (2584£ p.a.)

Now we come the most important asset of our business which are the people who are working for us. We will hire one retailer who is responsible for Sales & Marketing and then we will need 3 designers who will make our T-shirt appealing for the customers, one accountant who keeps track of our cost. Finally, one director who makes sure that everyone does his work properly and advices them how to do it.

We have decided to have direct labour and fixed labour. The wage for direct labour will be 7£ per hour and therefore it will be a variable cost. Furthermore we have decided that the wage will 7 pounds since the minimum wage in UK is 6.95£.Furthermore our T-shirt represent a dynamic culture hence our labour will be young people between 21-24. This age group are students. These people will also gain experience from making T-shirts which will benefit also their CVs. Since we are producing at a certain limit we don’t need to make the direct labour as fixed cost; a new worker is recruited every two months in order to keep up with the increased production of T-shirts. The retailer, the accountant and the designers will be a fixed cost since they have to be always steady in our business and we decided to give them 8£ per hour since their work is more sophisticated then a person who makes the t-shirt, in fact in our company our wages are split depending on the worker’s position. Then we will have our director who works in the highest position earns a fixed wage of 10£ per hour; he has the highest payment since he has to monitor every aspect of our business. In addition to that we will hire a trainer who will train our employees so our business can grow better and the payment will be 250£ per year where the trainer comes twice a year.

The T-shirt industry is a big industry and therefore we know that we have to make our prices competitive. Furthermore, we have to position our self in the right way. Our group decided not to be in the luxury part of T-shirts because we took from the bank 15,000£ to pay for our capital expenditure and the starting expenses. Due to the fact that we want to finance ourselves with the repayments for the sales. Therefore, we decided to make T-shirts, which everyone can afford and hence the mass group of the people.

Since our business is a partnership we do not want much financing of other entities but we will get a loan from our Bank which is 15.000£. The loan will be granted because we have enough fixed assets which can back up our loan if we default. We will pay our suppliers 40% of the previous month and 60% of the current month since we have our specific department who will give us such a deal.

Since we go for the mass people we made our T-shirts very simple. One T-shirt is made of 900gr. of cotton and 15gr of thread. The quality of our materials are high quality. Hence we pay a lot for our direct materials compared to the average type of cotton. The reasoning for this is that we want to offer a reasonable value for the customers. This is why the price of our direct materials are not so high compared luxury brands. Therefore making the T-shirt will take our workers around 15 minutes give or take per T-shirt, while including the time lost per workers.

The selling price for our T-shirt will be 20£. This price will position our product for the mass people since the price is very reasonable. At the start of the business will assume that we cannot sell many T-shirts since our business just started and therefore we will sell in the first month only 2000 T-shirts but as times goes on our business get more sophisticated and therefore we will increase our production 10% for the first 6 month and after the 6 month it increases by 5% since the last 6 months is a winter season and we assume that our T-shirts are based on seasons as well. We assume that the majority of our customers are not from a high social class, so they have to pay only 50% with cash in the same month and the remaining 50% we will receive the next month.

Our first opening stock will be 0 since we will start our machinery will be installed and will be functioning in the first month of 2017 but our closing stock will be 100 units for the first month and it will increase 10% for the first 6 month and after the second 6 months it will be 5% since we said that our production will increase by 10% in the first 6 months and then 5% for the remaining months. The closing balance for our direct material will be 30 gr. in cotton and 5 gr. for thread and it increases for the first 6 months by 10% and the remaining months by 5% the reasoning is because of the production which is mentioned above.

In our business we do not do any withdrawals since we are planning the business for one year. In our fixed costs we will have our rent for the factory, that is 3000 per month, as well as utilities such as water, gas &electricity which is 1000£ each month and our office expenses such as paper, pen, print colours etc. that is 200£ per month. We have decided that we will advertise our products online since we live in a world where online marketing becomes more and more important and outside the tube, that the cost will be 250£ for 2 weeks for 6 sheet panels, for a total amount of 500 £ each month.

With the helpful managing accounting skills we have a better understanding of careful planning and decision making. This is our success secret of our business and as you can see on our Income statement it proves that our business is almost as successful as Mr. Williams’s business.

Table of assumptions:

· Our product are quality made t-shirts, made from scratch and are cotton based. After making the shirts in a variety of colours we use our T-shirt heating press to print beautifully aesthetic designs that our wonderful designer make.

· Amount of Material used (cotton 900 gr and thread 15 gr.)

· How many minutes to produce 1 t-shirt (15 min) including time lost by workers

· When we open the company we decide to buy: 1. 5 T-shirt heating press machine (320£* 5) 2. T-shirt making machine (8000£) 3.furniture (320) 4.6 computer 3000£(1 for marketers, 3 for designers, 1 accountants and 1 for director) All of these is our capital expenditure and we have calculated a depreciation of 20% for 5 years.

· Selling price 20 £, the first month we sell 2000 t-shirt and we increase our production by 10% for the first 6 months of the year and by 5 % for the second 6 months.

· Our customers pay by cash but 50 % in the same month and 50% in the following month

· Being the first year , for units produced, our opening stock is zero, instead our closing stock in the first month is 100 and it increase by 10% for 6 months and then by 5%

· For units purchased the first closing balance is 30 for the cotton and 5 for the thread (increase 10% and then 5%)

· Other variable cost: transfer paper15£ for 100 t-shirt

· We have direct labour and fixed labour, the wages for the workers (variable) is 7£ per hour instead for the designer, (fixed) accountant and retailers is 8£ and for the director is 10£. Furthermore we pay twice a year a trainer for our employees (250£ each year)

· Other fixed cost are: rent factory, utilities (as electricity, lighting), office expenses (paper, print colour, pens..) and the advertising in our case only online and at the tube entry (the price is 250 for 2 weeks for 6 sheets panel)

· We take on January a bank loan of 15000 only to pay our capital expenditure and some starting expenses. As we want to try to finance it alone during the year. We promise to pay a simple interest rate of 5% p.a.

· We pay our providers 40% of the previous month and 60% of the current month, all thanks our ability to negotiate.

· In conclusion, we want to say that our company need to be well managed and control, in fact with our good job we have all time good at the end of the year thanks to the meticulous management calculations.

Bibliography:

1. Anon, (2016). [online] Available at: 1. http://uk.businessinsider.com/teespring-glyn-williams-top-seller-profile-2015-11 [Accessed 18 Nov. 2016].

2. DIY, 5. (2016). 5 in 1 Transfer Sublimation Heat Press Machine T-Shirt Mug Hat Plate Cap DIY | eBay. eBay. Available at: http://www.ebay.co.uk/itm/like/171942560808?lpid=122&chn=ps&adgroupid=32954122545&rlsatarget=pla-256745042600&adtype=pla&poi=&googleloc=1006886&device=c&campaignid=659583801&crdt=0

3. MonsterDoodles. (2016). PixMax� 5 in 1 Multi Mug Press. [online] Available at: http://www.monsterdoodles.co.uk/50x50cm_%20Sublimation_TShirt_Press_10313.html?source=googlebase&gclid=CjwKEAjws5zABRDqkoOniLqfywESJACjdoiGu46c8uKqva6CqmWzHZYrjNOckvM7dwcvjO86OkirmxoCn9bw_wcB.

4. Caboodle.co.uk. (2016). Epson A4 T-Shirt Transfer Paper [10 Pack] – C13S041154 – S041154. [online] Available at: http://www.caboodle.co.uk/office-supplies/paper-card/t-shirt-transfer-paper/epson-a4-t-shirt-transfer-paper-%5B10-pack%5D-c13s041154/?gclid=CjwKEAjws5zABRDqkoOniLqfywESJACjdoiGyxBT5D26SiT89KwoRaYffP7DHo3SgTfwoPOOY1dyzBoCZrvw_wcB .

5. Madehow.com. (2016). How t-shirt is made – material, production process, manufacture, making, used, dimensions, product. [online] Available at: http://www.madehow.com/Volume-2/T-Shirt.html.

6. brain, A., Innes, D., Green, A., m, j., dean, E., Smith, J. and Stockham, J. (2016). Minimum Wage UK 2016 Rates. [online] Minimum Wage. Available at: http://www.minimum-wage.co.uk/.

7. Cotton.org. (2016). Frequently Asked Questions- National Cotton Council. [online] Available at: http://www.cotton.org/edu/faq/.

[Data]

B.E.R.C T-shirt

We will start our business in London from the first of January 20

Table of assumptions:

· Amount of Material used (cotton 900 gr and thread 15 gr.)

· How many minutes to produce 1 t-shirt (15 min) including time lost by workers

· Selling price 20 £, the first month we sell 2000 t-shirt and we increase our production by 10% for the first 6 months of the year and by 5 % for the second 6 months.

· Our customers pay by cash but 50 % in the same month and 50% in the following month

· Being the first year , for units produced, our opening stock is zero, instead our closing stock in the first month is 100 and it increase by 10% for 6 months and then by 5%

· For units purchased the first closing balance is 30 for the cotton and 5 for the thread (increase 10% and then 5%)

· Other variable cost: transfer paper15£ for 100 t-shirt

· We pay our providers 40% of the previous month and 60% of the current month, all thanks our ability to negotiate.

Bibliography:

1. Anon, (2016). [online] Available at: 1. http://uk.businessinsider.com/teespring-glyn-williams-top-seller-profile-2015-11 [Accessed 18 Nov. 2016].

5. Madehow.com. (2016). How t-shirt is made – material, production process, manufacture, making, used, dimensions, product. [online] Available at: http://www.madehow.com/Volume-2/T-Shirt.html.

6. brain, A., Innes, D., Green, A., m, j., dean, E., Smith, J. and Stockham, J. (2016). Minimum Wage UK 2016 Rates. [online] Minimum Wage. Available at: http://www.minimum-wage.co.uk/.

7. Cotton.org. (2016). Frequently Asked Questions- National Cotton Council. [online] Available at: http://www.cotton.org/edu/faq/.

[Data]

B.E.R.C T-shirt

We will start our business in London from the first of January 20

Table of assumptions:

· Amount of Material used (cotton 900 gr and thread 15 gr.)

· How many minutes to produce 1 t-shirt (15 min) including time lost by workers

· Selling price 20 £, the first month we sell 2000 t-shirt and we increase our production by 10% for the first 6 months of the year and by 5 % for the second 6 months.

· Our customers pay by cash but 50 % in the same month and 50% in the following month

· Being the first year , for units produced, our opening stock is zero, instead our closing stock in the first month is 100 and it increase by 10% for 6 months and then by 5%

· For units purchased the first closing balance is 30 for the cotton and 5 for the thread (increase 10% and then 5%)

· Other variable cost: transfer paper15£ for 100 t-shirt

· We pay our providers 40% of the previous month and 60% of the current month, all thanks our ability to negotiate.

Bibliography:

1. Anon, (2016). [online] Available at: 1. http://uk.businessinsider.com/teespring-glyn-williams-top-seller-profile-2015-11 [Accessed 18 Nov. 2016].

5. Madehow.com. (2016). How t-shirt is made – material, production process, manufacture, making, used, dimensions, product. [online] Available at: http://www.madehow.com/Volume-2/T-Shirt.html.

6. brain, A., Innes, D., Green, A., m, j., dean, E., Smith, J. and Stockham, J. (2016). Minimum Wage UK 2016 Rates. [online] Minimum Wage. Available at: http://www.minimum-wage.co.uk/.

7. Cotton.org. (2016). Frequently Asked Questions- National Cotton Council. [online] Available at: http://www.cotton.org/edu/faq/.

[Data]

Turn in your highest-quality paper
Get a qualified writer to help you with

“ Accounting and Finance ”

Get high-quality paper

NEW! AI matching with writer

Hire a Writer

Client Reviews

4.9

Sitejabber

4.6

Trustpilot

4.8

Our Guarantees

100% Confidentiality

Information about customers is confidential and never disclosed to third parties.

Original Writing

We complete all papers from scratch. You can get a plagiarism report.

Timely Delivery

No missed deadlines – 97% of assignments are completed in time.

Money Back

If you're confident that a writer didn't follow your order details, ask for a refund.

New to Your Trusted Assignment Help Service? Sign up & Save

Calculate the price of your order

Type of paper needed:

Pages:

You will get a personal manager and a discount.

Academic level:

We'll send you the first draft for approval by at

Total price:

$0.00

Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.

Power up Your Study Success with Experts We’ve Got Your Back.

Order Now Order Now