Sales for October November and December are expected to be R200000
R180000 and R220000 respectively for Ripken Company. All sales are on
account (terms 2/15 net 30 days) and are collected 50 percent in the month of sale
and 50 percent in the following month. One-half of all sales discounts are taken on
the average. Materials are purch
Materials used 40000 36000 44000
Salaries 70000 68000 72000
Maintenance and repairs 18000 18000 18000
Depreciation 36000 36000 36000
Utilities and other 14000 14000 14000
Dividends paid -0- 10000 -0-
Payment on bonds 8000 8000 8000
Using the given information prepare a cash budget for November. (6)
Question 7: Control systems (14 marks)
Timothy SA. uses a flexible budget for overhead costs. The company expects to
produce 40000 units of the product it manufactures. Each unit requires 0.40 direct
labour hours. The cost formulas for each of the four overhead items (where X is
measured in direct labour hours) is as follows:
Cost Formula
Power 0.40X
Maintenance R15000 + 0.60X
Indirect labour R18000 + 2.50X
Rent R20000

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