Please complete this Managerial accounting assignment by 1/8/2021 1PM Greenwich London time.
Question 1: (20 marks)
Implementation of a company’s strategic plan often begins by determining management’s basic expectations about future economic, competitive, and technological conditions, and their effects on anticipated goals, both long-term and short-term. Many firms at this stage conduct a situational analysis that involves examining their strengths and weaknesses and the external opportunities available and the threats that they might face from competitors.
After performing the situational analysis, the organization identifies potential strategies that could enable achievement of its goals. Part of this process involves business managers creating budgets to plan for future operations, create benchmarks to measure progress, and maintain necessary accounting controls.
Required:
A. Clearly define and explain the nature of a Master budget and why it is important to prepare such a budget. (5 Marks)
B. Besides preparing the master budget, management accounting is also involved in the role of preparing functional budgets. Among these functional budgets are the Sales, production and cash budget. Discuss the nature of these budgets and 3 factors that need to be considered in preparing these budgets. (15 Marks)
Question 2: (30 marks)
United Garments company sales in December 2019 were $80,000 and they are expected to rise by $6,500 per month for the next 5 months. Of sales, 80 per cent are collected during the month of sale and the rest two months after sales. The cost of sales is 60 per cent of sales and, the company plans to keep an inventory at the end of each month equal to forty per cent of the anticipated sales for the next month’s sales. Suppliers are paid one month after purchases are made. Monthly wages amount to $4,000, rent and heating $700 and depreciation $600. A machine is to be bought in March for $8,000 paid in cash. The purchase of the machine means that the monthly change for depreciation will increase by $40. The inventory held at January 1st is $16,500.
Required:
1. Calculate the estimated cash collection from sales for February and March. (6 marks)
2. Calculate the purchases for February and March. (10 marks)
3. Assuming that the cash balance at 31/01/2020 is $10,000; prepare a cash budget for the two months ending March 31, 2020. (12 marks)
4. Discuss whether the company will be able to repay a loan of $75,000 at the end of March. (2 marks)
Question 3 (20 Marks)
A. James Henderson is the president of York Athletics, a producer of hats and jerseys and other accessories for fans of several professional sports teams. Imagine you are the accountant in charge of all accounting functions at Sportswear. She reviewed the most recent financial statements, and noticed that the company did not do as well as they had planned. She wanted to look more closely at the profitability of each of our products to determine exactly what happened, but realized that she did not have this information in the financi
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