ABC Company has a policy of maintaining an inventory of finished goods equal to 25% of the following month's sales units. For the forthcoming month of June, the budgeted beginning inventory is at 20,000 units and the ending inventory at 22,000 units. The following are the budgeted sales for the months of August to October October August 90,000 September 92,000 94,500 The sales price the finished goods per unit is P150 based on gross profit rate (on cost) of 15%. October ending inventory is estimated to be at 20% less than September's. Operating expenses were estimated as follow: ● Selling expense is at 2.75% of sales Salary expense is at P5,000 + 3% of sales ● General and Administrative Expense is at P40,000 per month
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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