ឈ្ម ោះ : ថាន់ សុភ័ក្រនុសិទ្ធិ

ជំនាន់ : 28/1
Homework 3
បនទប់ : 21/A
Cash Budget for my personal gas station for 2022

• Projected diesel and petrol sales (first three months, 2022)

Diesel Petrol
Quantity 1,000 liters 3,000 liters
Sales price $1 $1.50
Sales revenue $1,000 $4,500
Total $5,500

• Stock of beginning inventory

Diesel Petrol
Quantity 700 liters 2000 liters
Cost $0.80 $1.20
Total value $560 $2,400
Total $2,960

• Productions requirements for three months

Diesel Petrol
Projected unit sales + 1,000 liters + 3,000 liters
Desired ending inventory (assumed to represent
20% of unit sales for the time period) + 200 liters + 600 liters
Beginning inventory - 700 liters - 2,000 liters
Units to be produced 500 liters 1,600 liters

• Unit costs
Diesel Petrol
Materials $0.25 $0.50
Labor $0.30 $0.30
Overhead $0.20 $0.20
Total $0.75 $1

• Total production costs

Diesel Petrol
Units to be produced 500 liters 1,600 liters
Cost per unit $0.75 $1
Total cost $375 $1,600 $1,975
 • Allocation of manufacturing cost and determination of gross profits
Diesel Petrol Combined
Quantity sold 1,000 liters 3,000 liters 4,000 liters
Sales price $1 $1.50
Sales revenue $1000 $4,500 $5,500
Cost of good sold :
Old inventory
Quantity 700 liters 2,000 liters
Cost per unit $0.80 $1.20
Total $560 $2,400
New inventory
Quantity 300 liters 1,000 liters
Cost per unit $0.75 $1
Total $225 $1,000
Total cost of goods sold $785 $3,400 $4,185
Gross profit $215 $1,100 $1,315

• Value of ending inventory

+ Beginning inventory $2,960
+ Total production costs $1,975
Total inventory available for sales $4,935
- Cost of goods sold $4,185
Ending inventory $750

*** For our gas station, we assume that :

- General and administrative expense = $165
- Interest expense = $50
- Common stock dividends = $75 .***

• Pro Forma Income Statement

March 31, 2022
Sales revenue $5,500
Costs of good sold $4,185
Gross profit $1,315
General and administrative expense $165
Operating profit $1,150
Interest expense $50
Earnings before taxes (EBT) $1,100
Taxes (10%) $110
Earning after taxes (EAT) $990
Common stock dividends $75
Increase in retained earnings $915
 • Monthly sales pattern

January February March

$1,500 $1,000 $1,500

• Monthly cash receipts

December January February March

Sales $1,000 $1,500 $2,000 $1,200
Collections:
(30% of current sales) $450 $600 $360
Collections:
(70% of previous month’s sales) $700 $1,050 $1,400
Total cash receipts $1,150 $1,650 $1,760

• Component costs of manufactured goods

Diesel Petrol
Units Cost Total Unit Cost Total Combined
Produced per Unit Cost Produced per Unit Cost Cost
Materials 500 liters $0.25 $125 1,600 liters $0.50 $800 $925
Labor 500 liters $0.30 $150 1,600 liters $0.30 $480 $630
Overhead 500 liters $0.20 $100 1,600 liters $0.20 $320 $420
$1,975

• Average monthly manufacturing costs

Average
Total Costs Time Frame Monthly Cost
Materials $925 3 months $308
Labor $630 3 months $210
Overhead $420 3 months $140
• Summary of all monthly cash payment

December January February March

Monthly material purchase $250 $308 $308 $308

Payment for material
(prior month’s purchase) $250 $308 $308
Monthly labor cost $210 $210 $210
Monthly overhead $140 $140 $140

General and administrative expense

($165 over 3 months) $55 $55 $55
Interest expense $50
Taxes (two equal payments) $110 $110
Cash dividend $75
Also:
New equipment purchases $125
Total payments $765 $838 $948

• Monthly cash flow

January February March

Total receipts $1,150 $1,650 $1,760
Total payments $765 $838 $948
Net cash flow $385 $812 $812