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 What is the dollar value of Capid’s purchases in November and 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
What is the dollar value of Capid’s purchases in November and December?
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Why was the amount for December multiplied by 40 and the amount for January when its 40% of the prior month and 60% of the current?
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