13. Skinny Pete Department Store has prepared the following sales budget for the next quarter: October November December $300,000 $400,000 $500,000 Budgeted Sales Skinny Pete's gross profit ratio is 40%. Each month's ending inventory must equal 25% of the cost of the merchandise to be sold in the following month. The merchandise inventory at October I was $45,000. The cost of merchandise to be purchased in November is: a. $170,000. b. $255,000. c. $265,000.
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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