You are the Management Accountant of Tetra Ltd. You have the following information: 1. Actual sales (units)2012 May June

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You Are The Management Accountant Of Tetra Ltd You Have The Following Information 1 Actual Sales Units 2012 May June 1 (241.03 KiB) Viewed 57 times

You Are The Management Accountant Of Tetra Ltd You Have The Following Information 1 Actual Sales Units 2012 May June 2 (360.84 KiB) Viewed 57 times

You Are The Management Accountant Of Tetra Ltd You Have The Following Information 1 Actual Sales Units 2012 May June 3 (311.99 KiB) Viewed 57 times

You are the Management Accountant of Tetra Ltd. You have the following information: 1. Actual sales (units)2012 May June 8000 10 000 Budgeted sales (units) July 7 000 August 7 500 September 8000 October 9 500 November 11 000 December 9 400 Units are sold at a price of $15 per unit. 111. Sales are made as follows: 40% of total sales are paid for in the month of sale (customers who pay in the month ofsale receive a 2% discount) 60% of total sales are on credit and are paid for in the month after sale 1. Goods are purchased, at a cost of $7 per unit, so that inventory at the end of each monthis equal to the next two months' sales. Purchases are paid for in the month of purchase
Wages of $8 000 per month are paid in the month in which they are earned. The companyhas recently concluded negotiations with the unions representing its workers. The agreement calls for a 5% wage increase, beginning in July. i Staff are paid a bonus of 2% on all sales in excess of $100 000 each month. The bonus ispaid in the following month. 11. Other expenses currently amount to $12 000 per month and are paid in the month inwhich they are incurred. These expenses include depreciation of $3
000 monthly. Tetra Ltd will purchase fixed assets for $30 000 in September 2005. These assets will bepaid for in three equal monthly installments, starting in September. The balance at bank on 30 June 2005 is $16 000. ed: Prepare the following: 1. A sales budget for the period July to October 2010. [2 marks) ii. A purchases budget for the period August to October 2010 (6 marks) 111. A cash budget for the period August to October 2010 (12 marks) You attend a Jamaica Manufacturing Association forum. While you are there, anacquaintance makes the following statement. "I don't understand it. Each year, top management of my company gets together and setsthe budget. However, our mid-level managers never seem to be interested in the final budget; in fact, they always achieve below target performance. Each year, these managerslose bonuses because they don't make their targets. Instead of working harder to improve, they often leave the company!** Explain to your acquaintance the reaction of his company's middle managers, and suggest how the situation may be improved. (5 marks)