Capid Corporation is a wholesaler of industrial goods. Capid purchases 40% of its industrial goods in the month prior to the sale and 60% in the month of the sale. Capid’s cost of goods sold is 75% of sales. Capid budgeted sales of industrial goods are: November $135,000 December $150,000 January $125,000 Capid purchases all its industrial goods on credit. Capid pays for 40% of its purchases in the month of the purchases and 60% in the month following the purchases. Based on your answer to question 3, what are Capid’s budgeted cash disbursements (or cash payments) to the manufacturer of the industrial goods in December?
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.
Capid Corporation is a wholesaler of industrial goods. Capid purchases 40% of its industrial goods in the month prior to the sale and 60% in the month of the sale. Capid’s cost of goods sold is 75% of sales. Capid budgeted sales of industrial goods are:
November $135,000
December $150,000
January $125,000
Capid purchases all its industrial goods on credit. Capid pays for 40% of its purchases in the month of the purchases and 60% in the month following the purchases. Based on your answer to question 3, what are Capid’s budgeted cash disbursements (or cash payments) to the manufacturer of the industrial goods in December?
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