金陵科技学院-管理会计（双语）Group Assignment - Question.pdfVIP

Case Frame-it Ltd is a manufacturer of metal picture frames. The firms two product lines are designate S (small frames: 12 x18 cm) and L (large frames: 20 x 25 cm). The primary raw materials are flexit metal strips and 23 cm by 60 cm glass sheets. Each S frame requires a 2/3 metre metal strip; an L frame requires a 1 metre strip. Allowing for normal breakage and scrap glass, Frame-it can get either four S frames or two L frames out of a glass sheet. Other raw materials, such as cardboard backing, are insignificant in cost and are treated as indirect materials. Frame-it is preparing the documentation to support their finance application. As Head of Finance (Budgets) you are required to prepare a Budgeted Balance Sheet for the period ending 31 December 2011. In order to allow the board to understand and explain the balance sheet predictions you are required to also provide all the supporting schedules that were needed to compile the budgeted balance sheet. Your study of the organisations accounting system has revealed the following information. 1. Sales in the fourth quarter of 2010 are expected to be 50,000 S frames and 40,000 L frames. The sales manager predicts that, over the next two years, sales in each product line will grow by 5,000 units each quarter over the previous quarter. For example, S frame sales in the first quarter of 2011 are expected to be 55,000 units. 2. Frame-its sales history indicates that 60 per cent of all sales are on credit, with the remainder the sales in cash. The companys collection experience shows that 80 per cent of the credit sales collected during the quarter in which the sale is made, while the remaining 20 per cent is