unit 15 sleepy hollow limited

meibaker

hi, i am doing the sleepy hollow simulation test, but i am stuck on task 1 cash flow payments, does anyone know how to work out the wood suppliers and production wages for the 4 months! thanks

mikes

For the January wood suppliers figures, this is the Trade creditors figures from the balance sheet.

for the other months, because the payment terms are a months credit, then for Febuary, you would take the expected January sales from the Sales memo, then add the finished bed stock from the production memo and deduct the finished stock on the same memo. This tells you how many beds are to be produced that month.

Each bed uses 10 metres of wood at £5 per metre, multilpy this by the production to give you the suppliers costs.

The production memo will also tell you how much the wages are for each month, ie the length of time for each bed and the hourly rate.