Lisa has a women's fashion wear shop on the high street in the West End of London. She expects to have £1,000 left in the bank at the end of May. She is concerned about her plans to purchase women's fashion wear over the summer and the effects it will have on her bank balance.
Thus, she has forecasted her volume and pattern of sales for the coming months of June, July, August, and September. Lisa has also calculated the expenses incurred running the business for the three months of June, July, and August. Nadia's forecasts for the next few months are:
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Pattern of sales
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Product
Vol. of Sales for 4 months
Jun
Jul
Aug
Sept
Total
fashion wear (units)
2,000
870
609
435
87
2000
Opening stock of a month is 75% of that month's sales. The purchase price is £9.20/unit, and the selling price is £29.90/unit. Purchases and sales are both in cash.
Expenses
Cost for 3 months (£)
Pattern of expenses
Wages
18,000
Paid evenly throughout the period
Rent
15,000
Paid quarterly in January, April, July, and October
Depreciation of fittings
3,600
Charged equally throughout the period
Refurbishment of shop
8,500
Paid quarterly in March, June, September, and December
Total expenses
45,100
Prepare the following budgets:
The sales and purchases budget in units for the 3 months; (15 marks)