Assume that a company provided the following information and assumptions from its master budget: Sales budget: Unit sales in June, July, and August are 20,000, 18,000, and 17,000, respectively. The selling price per unit is $80. All sales are on account. 20% of sales are collected in the month of sale and 80% are collected in the next month. Production budget: The ending finished goods inventory is always 25% of next month's unit sales. Selling and administrative expense budget: The variable selling and administrative expense is $4.00 per unit. The total fixed selling and administrative expense is $60,000 including $11,000 of depreciation. What are the total budgeted cash disbursements for selling and administrative expense for July?
Assume that a company provided the following information and assumptions from its master budget: Sales budget: Unit sales in June, July, and August are 20,000, 18,000, and 17,000, respectively. The selling price per unit is $80. All sales are on account. 20% of sales are collected in the month of sale and 80% are collected in the next month. Production budget: The ending finished goods inventory is always 25% of next month's unit sales. Selling and administrative expense budget: The variable selling and administrative expense is $4.00 per unit. The total fixed selling and administrative expense is $60,000 including $11,000 of depreciation. What are the total budgeted cash disbursements for selling and administrative expense for July?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Assume that a company provided the following information and assumptions from its master budget:
Sales budget: Unit sales in June, July, and August are 20,000, 18,000, and 17,000, respectively. The selling price per
unit is $80. All sales are on account. 20% of sales are collected in the month of sale and 80% are collected in the next
month.
Production budget: The ending finished goods inventory is always 25% of next month's unit sales.
Selling and administrative expense budget: The variable selling and administrative expense is $4.00 per unit. The
total fixed selling and administrative expense is $60,000 including $11,000 of depreciation.
What are the total budgeted cash disbursements for selling and administrative expense for July?
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