Accounting for Managers: Interpreting accounting information for decision-making

436 ACCOUNTING FOR MANAGERS

Table A2.27

July August September Total

Receipts 20,000 30,000 50,000

Payments to creditors −5,000 −10,000 −20,000 −35,000

Wages −3,000 −4,000 −5,000 −12,000

Other expenses −2,000 −2,000 −3,000 −7,000

Net cash flow −10,000 4,000 2,000 −4,000

Opening balance 12,500 2,500 6,500 12,500

Closing bank balance 2,500 6,500 8,500 8,500

Table A2.28

Budget
in £’000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Revenue 225 225 225 225 225 225 150 150 150 150 150 150 2,250

Variable
operating costs

68 68 68 68 68 68 45 45 45 45 45 45 675

Fixed operating
costs

35 35 35 35 35 35 40 40 40 40 40 40 450

Total operating
costs

103 103 103 103 103 103 85 85 85 85 85 85 1,125

Gross profit 123 123 123 123 123 123 65 65 65 65 65 65 1,125

Overheads
Sales charge 15 15 15 15 15 15 12 12 12 12 12 12 162
Salaries 25 25 25 25 25 25 25 25 25 25 25 25 300
Depreciation 5 5 5 5 5 5 5 5 5 5 5 5 60
Rates 8 8 8 8 8 8 8 8 8 8 8 8 96
Heat, light and
power

333333222222 30

Total overheads 56 56 56 56 56 56 52 52 52 52 52 52 648

Operating profit 67 67 67 67 67 67 13 13 13 13 13 13 477

14.3
See Table A2.28.
The gross profit is 55% in the first half year and 43% in the second half year, because an
increased fixed cost is spread over a lower volume of sales.