Lecture 11 Flashcards
(10 cards)
Closing cash balance formula 
Closing balance= open balance+ receipts-payment payments
Total revenue formula
Revenue= unit sold x price per unit
Production formula
Production = sales + closing stock - opening stock
Labour hours formula
Labour hours = (mins per pizza x unit) / 60
Labour cost formula
Labour cost = hours x hourly rate
Loan interest (monthly)
Monthly interest = (x% / 12 ) x loan amount
What happens when avenue has received one quarter late?
Cash flow decreases in current quarter, increasing the funding gap 
What’s the impact of rising salaries in budgeting
Higher outflows, increasing negative cash balances and funding needed
Why is the production budget used instead of sales volume?
Because production determines material and labour costs, not sales 
What tool helps you compare budget versus actual performance
Variance analysis 
